Bharat Value Fund: The Wealth Company targets fund raise of Rs 10,000 crore

CHENNAI: The Wealth Company Asset Management Pvt Ltd, having already raised close to Rs 4,000 crore last year, is now looking to secure Rs 10,000 cr even as the Mumbai-based entity is gearing up to launch the Series IV of its Bharat Value Fund later this month.

Madhu Lunawat, managing director, The Wealth Company Asset Management (formerly Pantomath Capital Management), told reporters here on Thursday that with a focus on manufacturing, ‘Make in India, Make for the World,’ and rural consumption sectors, it is upbeat about closing the yet-to-be-launched fund from six months to a year.

It focuses on investing in traditional manufacturing and industrial businesses in tier 2 and tier 3 cities, targeting enterprises with annual revenues of Rs 500 crore or more.

Riding on the success of Rs 4,000 crore fund closure last year, she said it has made about 20 investments with an average stake of 15 per cent in companies that typically have 100 per cent promoter ownership initially. Their latest Rs 2,500 crore Bharat Value Fund (Series III) has raised 2,000 crore already, with an investment size of Rs 150 crore. The fourth fund will also be a Rs 3,000 plus size, she added.

With an investment approach that emphasises on profitability (focus on profit after tax) and bottom-line growth, unlike many private equity firms that primarily focus on top-line growth, Lunawat said this is aimed at helping companies improve corporate governance and professionalisation.

While it faces challenges in more conservative markets like south India, she is confident of making inroads as second and third generation business owners are becoming more open to external investment. Younger generations not wanting to continue family businesses, potentially impacting India’s economic growth, are some of the challenges it is looking to address. Armed with the experience of doing over 100

listings, Lunawat said The Wealth Company has focused on catering to the mid-market segment of India by identifying industrial clusters across the country.

Citing the examples of Gujarat, Rajkot, Jamnagar, among others, she said well-established entrepreneurs relied on bank finance or by pooling money from friends and

relatives or by ploughing back the capital into the business. “They are not exposed to the equity market. So if you see the MSME sector, equity market exposure came only

post-2013. Before that, they were using bank funding or you know, borrowing from our friends, family,” she pointed out.

It was in 2012, that the company forayed into launching funds, by targeting core sectors, that were typecast as ‘boring’ enterprises. But even for a spacecraft landing or a rocket launch, it is the backbone of these traditional industries that make such landmark events possible, Lunawat reasoned.

“India has 6.5 crore entities, located across industrial clusters of our country. We are the largest population in the world now,” she said, as she highlighted the auto component cluster of Tamil Nadu, as a shining example.

Considering TN to be an important state with a significant traction resulting in 5.15 per cent or Rs 155.10 crore of its overall AUM, she said it would like to scale its presence in TN, where it is aiming for a 15 per cent share of its AUM within five years. The company has made inroads into Coimbatore, Madurai, Hosur and Vellore. It is also in the process of finalising a deal with a FMCG company in Chennai, Lunawat said.