**InCred Alternative Investments Plans to Launch ₹1,000-1,500 Crore Fund**
InCred Alternative Investments, after successfully closing its first private equity fund at ₹575 crore earlier this year, is gearing up to raise a significantly larger second fund ranging from ₹1,000 to ₹1,500 crore. This strategic move aims to enhance the firm’s average deal size and attract a broader institutional investor base.
Vivek Singla, managing partner at InCred Alternative Investments, shared insights on the upcoming fund in an interview, stating, “We will aim to inject larger amounts from the second fund onwards, targeting an average ticket size of ₹140-150 crore across 7-8 companies, compared to ₹75-85 crore in the first fund.” The fundraising process is set to commence in the next quarter, with the final timelines and fund size contingent on market conditions.
The second fund will seek investments from both domestic and international sources, with domestic investors expected to contribute approximately 75% of the total corpus. This represents a slight shift in the firm’s limited partner (LP) mix, as the first fund primarily attracted domestic investors, with a significant portion of international contributions coming from non-resident Indians (NRIs). Incredibly, around 80-85% of the initial fund was sourced from domestic investors.
To date, InCred has invested in six companies from its first fund, including Niva Bupa, Purplle, Manjushree Technopack, Shadowfax, Biryani by Kilo, and Celebal Technologies. Approximately 55% of the fund’s capital has been deployed, with additional deals in the pipeline. The firm’s investment strategy emphasizes companies with substantial scale, strong product-market fit, operational profitability, and a clear path to an IPO within 3-4 years. Key sectors of interest include consumer, technology, enterprise, and financial services, with a focus on valuation discounts relative to publicly listed peers.
Singla highlighted the firm’s preference for high-growth companies likely to experience liquidity events in the near term, noting, “Given that the fund has a six-year duration, we can only invest in a certain segment of companies.” This approach is influenced by the differing return expectations of domestic and international LPs, with domestic investors typically seeking quicker returns. Consequently, InCred aims to balance its portfolio between growth and late-stage companies to better align with liquidity expectations.
The fundraising landscape has evolved since the pandemic, with founders now prioritizing the establishment of sustainable and profitable businesses. Singla remarked on the shift in focus from merely maximizing valuations to creating enduring value.
**FAQ**
**What is InCred Alternative Investments’ strategy for its second fund?**
InCred plans to raise ₹1,000-1,500 crore for its second fund, targeting larger average deal sizes and a mix of domestic and international investors, with a focus on high-growth companies poised for liquidity events.
