US-based private equity firm, Tano Capital is set to raise $200 million in its third round of funding before the end of calendar year, reports Livemint. The firm will exhaust its current funds in the two deals which are currently in process, one of which is with housing company VBHC Value Homes Pvt. Ltd.which is expected to close by the end of this month.
The fresh and bigger amount of funds, according to the person cited above, will help the company to make larger investments by increasing the ticket size of its investments from $10-15 million to $20-25 million.
Tano Capital had raised its first fund of $100 million in 2006 and the second fund of $111.3 million in 2012 from overseas investors. The firm usually invests in small and medium enterprises. In 2015, it invested $12 million to acquire a 16.4% stake in Windlass Biotech Ltd, a contract manufacturing firm serving pharmaceutical companies and also invested around $9.5 million in Arohan Financial Services Pvt. Ltd.
The firm is also focussing on exits, especially after the relaxation in norms in past few years. Two of its portfolio companies, Shree Shubham Logistics Ltd, an Agri-commodity warehousing firm and SSIPL Retail Ltd, a footwear manufacturer and retailer are planning for an IPO soon. Tano Capital will make an exit through these IPOs by selling its entire stake of 14.27% in Shree Shubham Logistics and 15.85% in SSIPL Retail.
According to data from VCCEdge, Tano Capital has made about six exits so far, totalling almost $60 Million across its two funds. In fact, many other PE firms are now making an exit signalling towards a positive fund-raising environment in the country. In this year only, firms such as Everstone Capital ($730 million) and India Value Fund Advisors ($700 million) have announced the final close of their new funds.
Moreover, with a new government coming at the centre last year who has aggressively pushed towards creating an investor friendly environment and improving macro indicators such as inflation, falling interest rates; there is a comparatively positive environment and image of India for investments, making it easy for PE funds to make profitable exits.
As per data from Venture Intelligence, Indian PE fund managers have managed to return $5.15 billion to their investors in the first six months of this year which is the highest amount secured through exits by domestic funds in the past five years.