The investment was announced on Monday and will go to India Business Excellence Fund V G, the fifth fund managed by MO Alternates, a unit of Motilal Oswal Financial Services. The fund is targeting a total size of $750 million, with an option to raise an additional $150 million.
According to IFC, the capital will be used to invest in 12 to 16 mid-sized Indian companies, with a focus on expanding business activity beyond major cities into lower-income and less-developed regions. The fund will also aim to increase women’s participation in the workforce at its portfolio companies, with IFC assisting in the design of workshops and workplace standards.
Mid-market companies, typically constrained by limited access to formal credit, have increasingly turned to private equity for growth capital and operational support. IFC said it invests in such funds to help businesses scale, create jobs, and improve competitiveness.
“IFC’s 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’s 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,” said Mohamed Gouled, IFC’s Vice President of Industries.
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This is IFC’s third investment in a Motilal Oswal-managed fund. It had previously invested $25 million in the firm’s second fund and $35 million in its fourth. In addition, IFC co-invested $10.4 million in VVDN, an electronics manufacturer, alongside the fund.Motilal Oswal Alternates manages over $2 billion in assets across private equity and real estate. Over the past two decades, it has invested $1.1 billion in 50 companies. According to data shared by the firm, it has recorded a gross multiple of 5x and a gross internal rate of return (IRR) of 26% on Indian currency terms across its investments.IFC, a member of the World Bank Group, focuses on private sector development in emerging markets. In fiscal year 2024, it committed $56 billion globally through a mix of financing and partnerships with private investors.
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