Kedaara Capital Closes India’s Largest PE Fund At $1.7 Bn

India-focused private equity firm Kedaara Capital has marked the final close of its fourth investment vehicle, Kedaara IV, at a whopping $1.73 Bn.

This will be Kedaara’s fourth fund in 12 years and was raised in just four months beginning last December. It would even surpass Chrys Cap’s $1.3 Bn Fund IX raised in 2023.

As per ET’s report, nearly 85% of this new fund was sourced from existing investors. Among them include three major Canadian pension funds — CPPIB, CDPQ, and OTPP — and German insurer Allianz, HarbourVest and Asia Alternatives.

The newly raised capital will reportedly be invested in sectors across banking, healthcare, consumer and SaaS. In addition, Kedaara Capital will scout both minority stakes and complete acquisition deals.  

Manish Kejriwal, founder and managing partner of Kedaara Capital, told ET, “Given the global challenges (lack of distributions) and how the denominator effect has impacted many LPs, we thought some might drop out and the fundraise would take a better part of the 2024 calendar year, but we had an almost 100% subscription rate.”

Kedaara Capital declined to comment on Inc42’s queries on the development. 

It is pertinent to note that this comes close on the heels of many local and global funds facing challenges in securing fresh commitments from investors to establish new capital pools after years of healthy fundraising. 

Founded in 2012 by ex-Temasek and General Atlantic executives Manish Kejriwal, Sunish Sharma and Nishant Sharma, Kedaara Capital is one of India’s oldest PE firms that has backed startups like Lenskart, Perfios, and Purplle. 

The PE firm raised its maiden fund in 2013 with a size of $540 Mn and followed it up with a second fund which reached a hard cap of $750 Mn in 2017. 

The latest fund is Kedaara’s fourth one, which is 54% higher than the third one at the final close of $1.1 Bn in 2021. 

Kedaara Capital typically invests between $25-75 Mn in each bet, which also goes up to $200 Mn in select situations.

Its portfolio companies like Avanse Financial Services, Spandana Sphoorty Financial Limited, and Aavas Financiers have already undergone IPOs. Moreover, it has acquired four organisations so far. Their most recent acquisition was Dairy Day Ice Cream last month.

Its recent ventures count the likes of Gavs Technologies, ASG Eye Hospitals and others.

Amid China’s capital outflows and evolving geopolitical dynamics, India emerges as an increasingly attractive destination for capital. Major global funds like KKR, Blackstone, and EQT are purportedly poised to deploy substantial investments in India over the next 5-8 years.

As per Bain, India’s share of Asia-Pacific private equity deals has surged to 23%, while China’s share has declined to a nine-year low of 31%. 

India is emerging as a strategic positioning for private equity firms while navigating uncertain market conditions. The growing Indian startup economy presents a lucrative opportunity for these foreign backers. 

Despite global macroeconomic headwinds, India continues to see investors raising funds in droves. Last year, 64 new funds, including venture capital funds, micro-funds, and corporate VC funds, were launched with a cumulative size of $5.6 Bn. In 2022, the country witnessed the launch of 126 funds that raised over $18 Bn for startup investments.