NEW DELHI: IFC, an international financial institution offering investment, advisory, and asset management services, is considering an equity investment of up to $25 million in a 'India 2020' fund as the fund aims to provide capital and strategic assistance to SMEs in the country.
The proposed investment is in the 'India 2020 Fund II', which is a successor to India 2020 Fund I.
The earlier fund with a size of $100 million had earned an estimated gross internal rate of return of 30 per cent.
“India 2020 Fund II has a target fund size of $125 million. IFC is proposing an equity investment of up to $ 25 million (nearly Rs 140 crore),” as per the notification issued by IFC.
The board of directors of IFC, a member of World Bank Group, is likely to discuss the proposed investment in a meeting on February 11.
India 2020 Fund-II aims to invest in sectors that benefit from and promote consumer demand and purchasing power like healthcare and education, as well as rural consumption and agribusiness.
MUSE Capital Advisors Limited, a private limited liability company, will act as the investment manager of the fund.
The India 2020 Fund-II aims to invest close to $5-15 million per investment for acquiring minority stakes in its target entities. Its investment focus will be on high growth businesses with a track record of product and process innovation and which are well positioned to bring about transformation in their respective sectors.