Motilal Oswal PE invests over `185 cr in Fincare

Mumbai Motilal Oswal Private Equity has picked up a minority stake in Fincare Small Finance Bank through a secondary acquisition worth around Rs 185 crore ($ 25 million), the fund said on Monday.

The investment is through India Business Excellence Fund–III, a fund managed and advised by Motilal PE. The firm did not disclose how much equity it will hold in the small finance bank. This transaction provides a partial exit to True North Fund, which was one of the key investors in Fincare. Its current investor base includes TA Associates, LeapFrog Investments, Tata Opportunities Fund, among others.

The Bengaluru-based MFI-turned small finance bank started operations in Jul 2017. Before converting into a small finance bank, Fincare Small Finance Bank largely conducted business from two entities Disha Microfin focused on the western region and the south-focused Future Financial Services. Motilal Oswal Private Equity currently manages three growth capital funds under the India Business Excellence Fund labels, which are focused on providing growth capital to mid-market companies across sectors.

It manages over Rs 7,500 crore of AUM across growth capital and real estate funds. India Business Excellence Fund-I was launched in 2007 with a Rs 550 crore corpus fully invested in 13 portfolio companies across food processing, bulk packaging, power transformers and power infra enablers, ITES, financial services, FMCG, auto components etc. Of the 13 investments, it has exited 12. The Rs 1,000 crore second fund, launched in 2012, is fully invested in 11 portfolio companies across financial services, life sciences, niche manufacturing and consumption-based sectors. The third fund of Rs 2,300 crore was launched in 2018 and is still in the investment phase.