Compounding Asset Partners, the investment firm founded by former Motilal Oswal Asset Management Company chief investment officer Niket Shah, is in advanced discussions to raise Rs 350 crore at a post-money valuation of Rs 1,200 crore as it prepares to enter India's mutual fund industry, sources told Moneycontrol.
The proposed fundraise is expected to attract investments from private equity firms, senior corporate executives and Shah himself. The capital will be used to establish an asset management company and apply for a mutual fund licence under the Securities and Exchange Board of India's (SEBI) alternative eligibility framework.
The transaction is likely to be completed in two tranches. The first will involve investments from prominent corporate executives, C-suite leaders and Shah, while the second, involving private equity investors, is targeted for completion in June, the sources said.
Several private equity firms are understood to be competing for an allocation in the proposed fundraise. Discussions are at an advanced stage, though the final valuation, investment commitments and legal documentation are yet to be concluded.
If successful, Compounding Asset Partners could become one of the few newly established investment firms to apply for a full-fledged mutual fund licence within its first year of operations.