Indusbridge Ventures has launched thematic fund on Aerospace and Defence sector on the alternative investment space with a target to raise ₹1,000 crore by first quarter of next year.
The fund has got commitments for ₹200 crore from high networth investors and large corporate venture arms while the partners will infuse ₹25 crore as sponsor capital.
Ravi Kapoor, partner of Indusbridge Ventures and former managing director and head of banking, capital markets at CitiBank said given the growing interest in this space, the fund should achieve the first close with a corpus of ₹300-400 crore by September-end and reach the target of ₹1,000 crore by first quarter of next year.
“We are already in discussion with all the top four private sector banks, all the top five non-bank wealth distributors on the street and they are all very excited about it. They are doing the due diligence on onboarding us,” he said.
After the first close of the fund, he added the fund distribution will be handled by them and the experts will focus on deploying the funds, said Kapoor.
Former Navy chief Admiral Karambir Singh and former Defence secretary Gargi Kaul have joined the fund as advisers.
The fund’s core strategy is to invest in Indian aerospace, defence and dual-use technology companies, leveraging a partnership with US-based deep-tech venture builder, Fedtech.
Fedtech has a strong history of working with the US Department of Defence and other government agencies. The exclusive partnership allows the fund to access critical US technology and provide an international “go-to-market” launchpad for Indian companies.
Defence focus
The portfolio of the fund will consist of about 30-40 per cent of strategic investments while the remaining will focus on establishing joint ventures in the defence and aerospace manufacturing.
Kapoor said the joint venture idea is resonating most among family offices and UHNIs which are keen to diversify their existing businesses by co-investing in new ventures sourced through the fund’s technology partnerships.
Typical, he said investments per venture are expected to be in the $3-5 million range, which is sufficient due to captive business opportunities that accelerate a project’s ramp-up.
The fund expects an exponentially increase in global demand for aerospace and defence products, disruptions in global supply chains, massive technology advancements in the sector and supportive government policies in India. These tailwinds, combined with India’s cost and technology competitiveness, are expected to fuel strong growth and attractive multiples for the foreseeable future.