Indian private equity (PE) firm Xponentia Capital Partners on Tuesday announced that it has raked in over Rs 1000 crore ($120 million) for its second fund as it looks to ramp up investments in the mid-market segment across the country.
The PE major announced the first close of its Opportunities Fund II in July 2022. So far, it has invested around $32 million in four companies, which are commercial electric vehicle maker Altigreen, fintech platform Zype, casual fashion brand The Souled Store, and education financing platform Auxilo.
With the amount raised, the fund claims to have oversubscribed and exceeded its initial target of $90.4 million.
“There are lots of good opportunities in the market today. In fact, it is best time to separate the good companies from the bad ones,” PR Srinivasan, founder & managing partner at Xponentia Capital Partners said on the sidelines of the Asia PE-VC Summit 2023 that was hosted by DealStreetAsia on September 5 and 6.
“The long-term growth story of India remains strong,” added Srinivasan as he highlighted the rise of domestic limited partners (LPs) in the Indian risk capital industry.
“Today, there are a lot of family offices coming up, besides the usual banks and insurance companies, among others, who are willing to invest in the sector. Unlike earlier times, the share of domestic capital has grown over the past few years,” he said.
The trend, experts say, goes on to highlight how India is tracking similar developments that took place in China, where domestic capital has become as large, if not larger than, foreign capital in alternative assets.
Xponentia LPs in the current fund include both existing and new backers from the Indian market, comprising high net-worth individuals (HNIs), family offices, insurance companies, and the Fund of Funds managed by the Small Industries Development Bank of India (SIDBI).
“We have raised the fund almost exclusively from the domestic market,” said Devinjit Singh, Managing Partner, Xponentia. “Investor appetite for the asset class has increased faster than I imagined, and we have raised the fund almost exclusively from the domestic market” he added.
Founded in 2018, Xponentia closed its first fund in 2019 with a corpus of Rs 351 crore. Together with its LPs, who co-invested in certain deals, the firm has parked a total corpus of Rs 450 crore across eight companies.
The company’s portfolio includes mortgage fintech startup Easy Home Finance, baby products company R for Rabbit, medical diagnostics company Medsource, India’s largest casual dining restaurant chain Barbeque Nation, and pilot training company FSTC.
Last year, Xponentia reported a full exit from Spoton Logistics and a partial exit from Barbeque Nation when the restaurant chain made its public market debut in 2011. The company expects to report one more exit later this financial year from a Fund I portfolio company.