We want to create mid-market champions: Jashvik Capital

MUMBAI : Private equity firm Jashvik Capital, which invests in mid-market companies in the healthcare and consumer sectors, has launched its first fund. In an interview, Naresh Patwari, Founder and Managing Partner, explained how the fund aims to identify high growth companies in large addressable markets. Edited excerpts:

Jashvik Capital has launched its first fund. What will be the focus?

We launched our fund in July and intend to raise $350 million with a firm cap of $400 million. We are flexible in terms of deal size and willing to invest anywhere from $10M to $50M from our funds. We strive to build Jashvik Capital in such a way that everyone involved feels that emotion towards the company. We have a differentiated and distinctive strategy. We only invest in sectors that we know very well, i.e. healthcare/pharmaceuticals and consumers. We only invest in profitable companies that are growing in excess of 18% annually in large addressable markets. We want to work with exceptional founders and help accelerate growth, make their businesses resilient and future-proof. We aim to build mid-market champions in healthcare and consumer sectors in India.

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What is the deal-making environment like in the face of looming recession fears in the West?

It is a very exciting time for investors and deal makers in our country. Indian private equity is well positioned to outperform other asset classes over the medium term. The outlook for overall economic growth is strong at 7-8%. The political framework is stable and continuously improving. Companies are confident about the future and seem willing to invest in growth. If we buy in the next 1-2 years, we will likely see margin expansion as we aim to exit. Finally, as Indian PE continues to mature as an industry, the quality and depth of liquidity options will continue to improve from the recent strong base. I expect late-stage growth stocks to significantly outperform other alternatives. Profitable growth becomes more valuable on the other side of any bull market. The country has many small and medium-sized businesses that are resilient, profitable and growing and have stood the test of time. We have the opportunity to invest in these companies and strengthen and scale them in a meaningful way.

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Capital is likely to become scarce and expensive in the foreseeable future. How should private equity funds fare from a fundraising perspective in this scenario?

With what is happening to interest rates and liquidity on a global scale, lenders will be even more critical and cautious about where they invest. At the same time, high inflation and concerns about economic growth in many parts of the world, including Europe, the UK, China and to some extent the US, make it even more important to allocate capital to top PE fund managers in order to outperform in your portfolio. Fortunately, India represents an attractive option for global investors. We will likely be the fastest growing major economy for at least the medium term, if not longer.

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