IFC is making a $60 million equity investment in India Business Excellence Fund, which is managed by MO Alternates, the private investment arm of financial services conglomerate Motilal Oswal Financial Services Ltd. 

IFC’s investment in the fund will be made along with an additional $60 million co-investment envelope that will allow IFC to selectively invest alongside the fund in future deals.

The fund with a target size of $750 million (with an additional green-shoe option of $150 million) will identify and support 12 to 16 mid-market companies with high growth potential, especially companies that can extend services beyond India’s major cities to low-income states.

In addition to providing capital, IFC will help the fund manager improve women’s participation in the workforce at investee companies through workshops and standard setting.

Vishal Tulsyan, MD and CEO, Motilal Oswal Alternates said the fund will provide growth capital to companies across India, including the distant tier-II and -III cities. IFC’s investment will encourage other local fund managers to raise funds that include investments in underserved regions and attract greater commercial institutional investors into the segment, he added. 

Mohamed Gouled, Vice President of Industries, International Finance Corporation, said the investment aims to leverage private capital and solutions to boost job creation, promote inclusive and sustainable growth, and support India’s transition to a higher middle-income country. It is critical to provide capital to companies in this mid-market segment to help India maintain economic growth to absorb additional employment and equitable access to opportunities, he added.