The private equity arm of Motilal Oswal is in the process of launching its fifth fund to raise around $1 billion that will be used to invest in growth capital, sources said.

This is expected to be the largest fund raise by Motilal Oswal Alternates and comes  two years after it raised ₹4500 crore under India Business Excellence Find IV, which is under deployment.

In response to an email sent seeking clarification, the company responded saying that it was yet to finalise details on the new fundraise plan. “We will inform you whenever we do.”

The private equity firm has been progressively raising the quantum of the funds raised by it over the year. In 2077 it launched its first fund under Indian Business Excellence Series and raised ₹550 crore and exited its investments with an internal rate of return of 26.8 per cent.

In 2012 it raised ₹1000 crore which is fully invested across 11 companies. The third fund, launched in 2018, raised ₹2300 crore and has been invested in 12 companies.

Some of the companies that it has invested in over the last couple of years include Pathkind Diagnostics, Gujarat-based Simpolo Vitrified, Asian Footwears, KreditBee, MSME lender SK Finance, Niva Bupa health insurance and Healthkart. Earlier it has invested in AU Small Finance Bank, Fincare Small Finance Bank, Molbio Diagnostics among others.

Funding climate

While the funding climate has been difficult with LPs (limited partners) being more discerning and exacting in their investments and expectations of returns, some of the larger India-based PE firms have been able to raise funds, due to their record of delivering superior returns.

In 2024, India-based PE funds raised around $4.3 billion, which was 29 per cent lower from year ago, while the number of investments fell 64 per cent to 85 from 234 year ago. While there were 51 firms that had raised funds, the top 10 accounted for 74 per cent of the total fund raise, data by LSEG Intelligence had had showed.