The Indian government has cleared foreign fund house Lazard's proposal to invest Rs 125 crore in its Lazard India Growth Fund (LGIF). The fund will focus on investing in mid-sized firms in the country.
According to a Press Trust of India (PTI) report, the fund will be registered with market regulator SEBI as a venture capital fund and the LIGF Trust plans to invest heavily in the mid-market companies, stopping just short of acquiring controlling stakes, official sources said.
The fund's focus will be on infrastructure, outsourcing and consumer driven companies, apart from other growth sector areas. However, the fund will not undertake investments in the real estate sector. With its investment, the international financial advisory and asset management firm Lazard Group's investment holding company Lazard Mauritius will hold about 25% of the equity shareholding in the fund.
Lazard also plans to incorporate a new company in India, Lazard India Advisors Pvt Ltd (LIAPL), which will manage the LIGF fund under an agreement to be executed between the fund trustee and LIAPL. Citing sources, the PTI report said that the new company will approach IL&FS Trustee Co Ltd (IL&FS) to appoint it as the trustee to the fund, of which 75% of the issued and paid up equity share capital will be held together by Indian investors and LIAPL.
Meanwhile, the government also approved US-based Lazard Group's proposal to invest, directly or through its subsidiaries up to 51% (Rs 25 lakh) in the paid up capital of LIAPL. LIAPL will be registered with the Securities and Exchange Board of India as a venture capital fund and will engage in asset management and investment advisory businesses.