A new fund of Rs 300 crore - Rs 400 crore focusing on healthcare and lifescience, spearheaded by Trivitron Healthcare founder G S K Velu is expected to hit the market by early next year. Velu, who recently sold his shares in pathology lab chain Metropolis Healthcare Ltd, will contribute a major share of about 60% to the fund.
The new fund is expected to hit the market by January or February 2016 and will be managed by professionals, said Velu, who refused to discuss his exit from Metropolis.
According to reports, Velu was disappointed in a deal which was concluded between PE firm Warburg Pincus and Shah family in April. Warburg Pincus sold its entire 27% stake in Metropolis to the Shah family.
Founded in 1981, both Shah family and GSK Velu and family owned 36.5% stake each as of September 30, 2014. The rest was with Warburg Pincus.
"I can't be a minority partner, in a business which was co-founded by me," said Velu, who might have been emotionally upset at the deal, but exited profitably, nonetheless. While the value of the exit was not disclosed, industry sources and reports say that US-based private equity firm Carlyle Group likely paid about Rs 850 crore - Rs 900 crore for Velu's 37% in the diagnostic chain which was founded in 1997-98.
Velu said in certain business he want to be operator and in certain business he want to be an investor.
"For investment we are creating a vehicle in which we are putting money. The new PE fund will look at growth investments and start-ups led by successful promoters. Health care and lifesciences will be the core focus and it is also open for technology and any other interesting sectors," said Velu, adding that the fund will be flexible as far as investment size concerned.
"Where there is a crisis, there is an opportunity. (There is) Nothing called good and bad time, you need to have your own philosophy," said Velu on whether the time is right to launch a fund. "There are also PEs who have made money during the crisis and investment offices. As long you are not too much depend on external funds (ours is predominantly our own fund) like minded people will partner in co-investment," said Velu.
He added, however, that this is the right time to make investments in India. "We are at (a) crossroads. If you wait it will become expensive".
Health care and life science as a whole have given good returns and they are recession proof also, he pointed out.
On Trivitron, he said, the company is growing and looking at more M&As. The company is targeting around 15-20% growth organically, with current revenues of about Rs 700 crore.
"We will look at inorganic growth for technology and market access in both and international markets. We also open for joint ventures. Sweet spot (for acquistion) is around Rs 100-150 crore," Velu said.
At some point of time, Trivitron will go for an initial public offer (IPO), when the company becomes a $1 billion in value, he added.
Currently the company has eight manufacturing factories including four in Chennai, two in Mumbai, one in Pune and one in Finland. The company said it is open for setting up facilities in developing countries like China, Malaysia, Turkey to have a plant. Depending on the incentives.
On Maxivision Eye Hospital, in which he has invested into, Velu said currently there are 15 operating hospitals in Telengana and AP. One in Delhi and other in Chennai. "We will look at eyecare very seriously. That is where operating investment will go by investing Max. Around Rs 100-150 crore will be put in eye care".
Maxivision expects to clock Rs 100 crore this year as compared to Rs 80 crore last year, he said.
"We are also looking at inorganic growth. Dominating the local market is better than going out and start marketing every year. May be one or two states will look at in South and west. These investment will be funded through the family office," said Velu.