Mumbai-based private equity (PE) firm Subhkam Ventures plans to invest one-fourth of the funds raised through the recently constituted Subhkam Growth Fund in environment-related businesses. The company has identified three firms involved in waste management and water infrastructure, where it will invest about Rs 100 crore.
This move on the part of Subhkam Ventures is indicative of PE firms? strategy of widening their portfolio through investment in innovative businesses. It may be noted that here that earlier, Yes Bank had announced a $300-million clean energy fund, which invests in companies engaged in energy efficiency, waste and water management.
Rakesh Kathotia founded Subhkam had announced the Subhkam Growth Fund, incidentally its first formal fund, in March. The first closure of the fund, through which the company hopes to raise $100-125 million, will be effected by mid-October. Investments will be completed in another 12-15 months.
Apart from environment-related businesses, Subhkam Ventures has identified core areas such as infrastructure ancillaries, education, financial services and healthcare for investing the fund.
Manu Punnoose, managing director, Subhkam, told FE, ?Though sectors such as waste management and water infrastructure are still at a nascent stage, they have immense potential. Also, firms in these sectors stand to benefit from subsidies provided by the central and state governments.?
He said that the unlisted companies ?which we are keen on? have an average revenue of about Rs 100 crore and Subhkam will pick up 15-20% in them.
In all, investments will be made in 12-15 companies, among which 5-6 will be infrastructure ancillaries firms, he added.
The company already has investments in Aqua Infra and Hydroair Tectonics in the water infrastructure and waste management sector respectively. Apart from them, it has invested in Hyderabad-based Bharat Biotech and agriculture firms such as Nagarjuna Agritech, Flowers Valley, and agro ancillary firm Shakti Pumps. It has investments in about 24 companies.
