Essel Finance Management, the financial services arm of Subhash Chandra-promoted Essel Group, is to launch a new fund for Small and Medium Enterprises with a ₹300-crore corpus to invest in emerging companies. Firming up its plans to be a financial services conglomerate, the company is also foraying into housing finance and micro finance, among others.
“We will not invest in any start-up company. We will invest in a company with a net worth of over ₹50 crore or a turnover of ₹100 crore. We will launch the fund next month. By December, we will complete ₹300 crore of fund raising, and then take one year to invest the money,” said Amitabh Chaturvedi, Managing Director, Essel Finance.
Investment strategy“This money will be given to SMEs that are ready for their Initial Public Offerings (IPOs) in the next 4-5 years — companies which are in existence for over 15 years, companies making profits but require a big push to target audience,” he said.
This will be Essel Finance’s first SME fund; it had earlier launched two real estate funds with ₹400-crore worth total assets under management.
“Our strategy is to be seen as a pure private equity player, instead of just a real estate player” Chaturvedi added.
The four-year-old company operates an NBFC, forex business, private equity business, and distributes various financial instruments.
Exploring new segmentsThe financial services firm is also planning to foray into housing finance, for which it got a licence about 10 months ago, with the launch of a company by September. By March 2018, it intends to have a portfolio of about ₹100 crore, which Chaturvedi expects to grow to ₹5,000 crore by 2020.
“Next year, we might look at acquiring a large housing finance company,” he added.
The company is also planning to foray into micro finance through an acquisition model, and scouting for a company with an advance book size of over ₹300 crore. Essel Finance, which is already into insurance broking, will also look at general insurance or life insurance, three years later.