Better known for buying chunky real assets in infrastructure and real estate, India’s National Investment and Infrastructure Fund (NIIF) is marking its first foray into start-ups with plans to acquire a US$150-200 million stake in children’s clothing e-commerce unicorn FirstCry.
NIIF is picking up secondary shares at an enterprise value of around US$2 billion from some of its current backers, who include Temasek’s venture capital subsidiary Vertex Ventures. The platform is planning an IPO within two to three years.
The company attained unicorn status in February last year after raising nearly US$300 million in a Series E round from SoftBank; another US$100 million was provided by the Japanese investor in January.
The Indian government has 49% stake in NIIF with the rest held by marquee foreign and domestic investors and multilaterals. NIIF is structured in three different funds: Master Fund (the largest infrastructure fund in India), Fund of Funds, and Strategic Fund. The fundraising and objectives of each of the funds is different, but the NIIF team is the same.
NIIF recently closed its Master Fund in late 2020 with US$2.34 billion from ADIA, AustralianSuper, CPP, OTPP, PSP and Temasek, as well as USA’s IDFC, the government of India and four other Indian leading institutions. NIIF also registered a Fund of Funds, which has already closed commitments from AIIB and ADB, and a Strategic Fund, for a total AuM of US$4.3 billion. Additionally, in November 2020, the government announced it would infuse US$810 million equity in NIIF’s debt platform, in its attempt to drive infrastructure creation.
The move into venture capital is new for NIIF, but the fund is looking to expand its sectoral exposure in line with the mandate of its Strategic Fund. It recently acquired a minority share in Manipal Hospitals. In return, the fund will invest INR20 billion (US$273 million), which will help pay for the company’s purchase of Columbia Asia Hospitals. The hospital operator is planning an IPO by 2024.