Mumbai-based Carnelian Capital is entering the private equity business with plans to launch a ₹1,500-2,000 crore fund targeting mid-sized Indian companies. According to reports from The Economic Times, the investment manager, which currently oversees about ₹18,300 crore across portfolio management services and alternative investment funds, plans to raise the maiden fund in the next 12-18 months. The firm will focus on profitable companies seeking ₹100-300 crore of growth capital, a segment founder and CEO Vikas Khemani believes has become underserved as private equity funds have grown larger. As Khemani explained, "The white space is in companies looking to raise ₹100-300 crore. There are very few meaningful funds catering to that segment."
As reported by The Economic Times, Khemani highlighted that most large domestic and global private equity firms now prefer transactions of ₹1,000 crore or more due to the size of their funds, leaving smaller but established businesses with fewer financing options. The IPO market has also shifted, with offer sizes moving to ₹800-1,000 crore, making public listings less viable for mid-sized companies. "Earlier these companies could access the IPO market, but now IPO sizes have moved to ₹800-1,000 crore. That has made it difficult for them to raise capital through public markets," Khemani stated. This market gap has created an attractive investment opportunity that larger buyout firms are increasingly overlooking.
According to The Economic Times, Carnelian Capital's fund will invest in profitable businesses with proven business models, targeting growth-stage and pre-IPO companies while avoiding early-stage venture investments and buyouts. The portfolio will span sectors such as manufacturing, healthcare, consumer businesses and innovation-led companies, with about 15 investments and ticket sizes ranging from ₹50-150 crore. Khemani confirmed that the firm has already identified investments and warehoused some deals that will be transferred into the fund after the first close.
As reported by The Economic Times, the fund is targeting gross returns of more than 30% and expects to begin returning capital after about five years. Carnelian Capital will invest about ₹100 crore of its own capital, which is more than 5% of the fund size, alongside investors. The firm also expects its experience in public markets and capital raising to provide an edge in sourcing and exiting investments.
