IIFL Asset Management Company Drives Rs 1500-2000 Crore For Investments In Tech-based Setups

IIFL Asset Management Company is looking forward to entering the technology sector and mainly with the start-ups in the country to boost India’s growth in the digital sector by investing in the rapid-growing setups aiming Initial Public Offering (IPO). The firm will be involved in investments in Pre-IPO, late stage or maturity stage of the companies, an executive from the company said to BW Businessworld.  

The company’s The IIFL Special Opportunities Fund - Series 8 combines a unique strategy and an experienced investment team led by Chetan Naik, Executive Vice President and Fund Manager, IIFL Asset Management, to target opportunities of the rising Indian internet economy.

In recent times with the value creation happening globally as technology and digital platform are taking over the world and creating a prominent hold in all sectors, developments in the tech will boost the growth aspect of the country and the company is emphasizing on the India Digital Growth Story, said the person cited above. 

The rapid growth in the country is creating more opportunities for investors in the digital space as the globe targets a completely digital world in the coming years. “More than $60 billion has been invested in India's internet start-ups in the past five years, with around $12 billion in 2020 alone", a HSBC Global report said.  

Earlier, the company engaged mostly in Pre-IPO investments, but the recent development comes with a varied outlook wherein the company is targeting investments at a later or maturity stage of the companies. IIFL AMC has recently made three Pre-IPO investments, the executive added. 

“The fund was launched couple of weeks ago and the enthusiasm and interest has pleasantly surprised us. We have received commitments of close to Rs.400 crore already”, said Chetan Naik – Executive Vice President and Fund Manager of the company. 

The company is currently targeting investments in different sectors such as EdTech, Gaming, Food Delivery, E-Commerce, Insurance Tech and Content Advertisement companies in the market. 

Looking at the food-delivery business, the country is expected to grow even bigger with competitive markets like China. "We expect 6 million online food orders a day by 2025. This is well behind China where 40 million orders are delivered every day," HSBC report said. 

As per the recent media reports, companies like Zomato and MobiKwik are likely to get listed on the bourses in the coming months. “One of the major food delivery players is something that the firm can look forward when opportunities are available”, the person cited above added. 

The source of raising funds for investments will be mainly done via HNI (High Net Individuals) and family offices. The fund is expected to invest $10-$20 million in about 10-15 companies, the company said.  

“The firm will invest in companies with visibility of multi-decadal growth. These are large market-size opportunities and are structural beneficiaries, which has a very strong unit economics and are either profitable or have a path to profitability. Besides, the fund will also scout for companies which have a low competitive intensity“, said Naik. 

Moving further, the Company projects that the Internet Economy in the country would create massive opportunities and large outcomes in the digital space.  

“India’s Internet Economy is expected to scale ~9x over the next decade and there is a large and growing consumer economy which is fast unfolding. Currently, Digital contributes 3% to India’s GDP compared to 11% in US and China”, Naik added quoting industry sources.