Financial services firm Vivriti Capital, which runs an online marketplace for mid-market corporates to raise debt, plans to raise ₹500 crore for a debt fund that will invest in companies in its marketplace, said a top executive of the firm.
Along with the marketplace model, where large-cap investors such as State Bank of India (SBI), ICICI Bank and Templeton Mutual Fund lend to mid-market corporates, Vivriti also lends from its own balance sheet as a part of these transactions to showcase its deep involvement in the business.
“There will always be different sources of capital, who want to invest in different ways, directly, on our balance sheet, and as a fund. We are raising this alternative investment fund (AIF) so that we have a structure that can absorb every type of money. The AIF becomes another participant in the marketplace," Vineet Sukumar, co-founder and managing director Vivriti Capital, said in an interview.
Vivriti’s own loan-book is about ₹1,000 crore, which it expects to grow to ₹2,500 crore by the end of this fiscal, Sukumar said. Disbursals from the marketplace are also expected to increase from about ₹19,000 crore so far to about ₹29,000 crore by 31 March 2020, he said.
The new debt fund will have a base size of ₹250 crore with an equal amount as a greenshoe option, which will let the fund raise more capital in case of robust investor demand.
The investors in the fund are expected to be large insurance companies, high net-worth individuals (HNIs), and bank treasuries, Sukumar said. “While the LP (limited partners) base will mostly be domestic, we are setting up a structure to raise money from overseas, and are setting up an offshore manager," he added.
Vivriti expects to close the fundraise by the end of this fiscal. The firm has already received commitments worth ₹140 crore, and plans to start investing from the fund from next month onwards, Sukumar said. He said the fund will lend to mid-size corporates and financial institutions with annual revenues of around ₹50 crore.
It also plans to raise further equity capital, and has started a formal process to raise ₹450 crore from private equity funds, Sukumar said.
The two-year-old company has so far raised ₹300 crore in equity from Creation Investments, a US-based impact investor.