Mumbai: JM Financial Ltd is set to hit the first close of Rs300 crore out of its targeted corpus of Rs1,000 crore for its second private equity (PE) fund, said two people aware of the matter.
The Mumbai-based financial services firm is engaged in investment banking, wealth management and private equity, institutional equity sales, trading and broking, among others.
In August 2016, Mint reported JM Financial’s PE business was planning to raise a second PE fund of Rs1,000 crore, similar to the corpus of the first fund raised in 2006.
“JM has tied up the first close of its fund largely from HNIs (high net-worth individuals). The formal closing is expected soon. They have also lined up some institutional investors who will be committing capital after the first close,” said one of the persons cited above.
In 2016, JM Financial had appointed Darius Pandole, former partner at New Silk Route (NSR) Advisors Pvt. Ltd, to look after the group’s PE business.
Pandole joined NSR at its inception in February 2007. NSR invested close to $1.4 billion in India and emerging economies in Asia across around 17 investments. Pandole was also associated with IDFC Private Equity Ltd, which he joined in February 2003, and went on to become its chief operating officer.
Pandole declined to comment on the development.
JM Financial’s first PE fund was co-sponsored by Old Lane Partners, a hedge fund run by Vikram Pandit, which was later acquired by Citigroup. Pandit, an Indian-born American banker, was the chief executive of Citigroup between 2007 and 2012.
The first fund committed capital in companies such as Mumbai-based pharmaceuticals firm DiagnoSearch Life Sciences Pvt. Ltd, salon chain Enrich, offshore logistics services firm Samson Maritime Ltd, farm equipment manufacturer International Tractors Ltd, auto components company Sona Group, knowledge process outsourcing firm Pre-Media Global and microfinance firm Spandana Sphoorty.
In February 2014, JM Financial exited its investment in Samson Maritime in a fund-raising round in which Kotak Private Equity put in about Rs150 crore.
According to a Business Standard report in February, the PE firm is planning to sell 32% stake in auto components company Sona BLW Precision Forgings Ltd to private equity investors.
Apart from its PE business, the financial services-focused group is also expanding its lending businesses.
In January, JM Financial raised $100 million (Rs650 crore) through a qualified institutional placement (QIP) offering.
The capital-raise was largely aimed at strengthening the group’s lending business.
JM Financial’s loan book stood at Rs7,043 crore as on 31 December. Out of this, corporate credit and structured financing stood at Rs2,766 crore, while the capital market lending book stood at Rs2,380 crore and real estate lending at Rs1,897 crore.
The group is also entering into affordable housing finance.