TVS Capital Funds Pvt Ltd has achieved the first close of its third fund, TVS Shriram Growth Fund 3, at ₹832 crore, fully from domestic investors.

The fund had targeted ₹700 crore for the first close, but received enthusiastic response, especially from family offices, investing ₹10 crore or more. Average commitments from all investors were around ₹7 crore with the sponsor group investing over ₹200 crore, according to a press release.

The fund is targetting a final close at about ₹1,200 crore. It expects to get additional commitments of ₹200 crore from its existing pipeline of investors. It will continue to be open, and solicit investments from new investors as well, according to the release.

The fund is in the final stage of issuing its first term sheet and expects to make the first investment by the end of the year.

Gopal Srinivasan, Chairman and Managing Director, TVS Capital Funds, said the third fund’s investment strategy would be the same as the previous fund. It would come in at the growth stage, but write larger cheques of ₹50-150 crore for a venture, with the sweetspot being ₹100-150 crore. It would do a couple of deals of ₹200-300 crore along with co-investors. In the second fund, the private equity fund invested ₹30-85 crore in growth stage companies.

Srinivasan said the investment appetite continued to be excellent, with good opportunities in the sectors it would focus on. TVS Capital Funds would invest in consumption-driven themes in financial services, food and lifestyle sectors.

More than the stake it would pick up in the companies it invested in, Srinivasan said TVS Capital Funds’ strategy would be to see how engaged and active it could be in these companies. It had played significant roles in companies it had a stake as low as 5 per cent.

With the first close of the third fund, TVS Capital Funds has raised more than ₹2,000 crore from domestic investors so far across its three funds.

According to the release, the second fund has performed strongly, tracking a healthy investor IRR. It has almost distributed the entire original capital back to its investors. Its most recent exit was from Nykaa, a leading online and omni-channel beauty products platform.

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