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CYCLICALS ARE BACK ON MUTUAL FUND RADAR AS PANDEMIC RISK TO GDP GROWTH EBBS
The domestic mutual funds increased exposure to cyclical sectors including
banking, capital goods, retail, and automobiles in December amid ebbing risk of
the third wave of the pandemic to the GDP growth.
* Ashutosh R Shyam
* ET Online
* January 18, 2022, 08:31 IST
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The domestic mutual funds increased exposure to cyclical sectors including
banking, capital goods, retail, and automobiles in December amid ebbing risk of
the third wave of the pandemic to the GDP growth. Cyclical sectors tend to
benefit the most from an economic recovery. According to the data from Motilal
Oswal Financial Services, the domestic funds raised the weight of cyclicals in
their portfolio by 160 basis points year-on-year to 58.8% in December.
The capital goods sector reported the highest traction among the domestic
cyclicals amid the capital expenditure recovery theme followed by the public
sector banks, and retail. The weight of capital goods companies in the domestic
funds’ portfolio rose to 5.9%; it was 240 basis points higher than its weight in
the BSE 200 index. Over 15 out of the top 20 funds are currently overweight on
the capital goods sector. Robust tenders and rising orders improved the
prospects of the capital goods sector. The trailing twelve-month order book till
December end was at a record Rs 8.7 lakh crore.
The domestic funds extended the capex theme to the PSU Banks, which tend to have
a greater share of corporate lending. The total bank credit growth was at a
26-month high of 9.2% in December. This brought back the PSU banks segment in
the top 10 sectors by weight in the domestic funds’ portfolio.
IT, a defensive bet, has been an exception since mutual funds continued to
increase allocation to the sector. The IT sector’s weight was at a multi-year
high of 13.5% in December. However, the domestic funds are still underinvested
in the IT sector by 200 basis points compared with the sector’s weight in the
benchmark BSE 200 index.
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FINANCIAL SERVICES
* 1 hr ago
CYCLICALS ARE BACK ON MUTUAL FUND RADAR AS PANDEMIC RISK TO GDP GROWTH EBBS
* 15 hrs ago
SINGAPORE CBANK ISSUES GUIDELINES TO DISCOURAGE CRYPTO TRADING BY PUBLIC
* 1 day ago
IPO-BOUND INDIA1 PAYMENTS AIMS TO DEPLOY 20,000 ATMS IN NEXT 4-5 YEARS
* 3 days ago
ASIA’S 1ST CRYPTO ETF MAY ROLL OUT IN GIFT CITY
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* 20 hrs ago
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SINGAPORE CBANK ISSUES GUIDELINES TO DISCOURAGE CRYPTO TRADING BY PUBLIC
Singapore cbank issues guidelines to discourage crypto trading by public
* Reuters
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SINGAPORE, - The Monetary Authority of Singapore (MAS) on Monday issued
guidelines that limit cryptocurrency trading service providers from promoting
their services to the general public, as part of a bid to shield retail
investors from potential risks.
Singapore is a popular location for cryptocurrency companies due to a
comparatively clear regulatory and operating environment and is among the
forerunners globally in developing a formal licensing framework.
But the city-state's authorities have repeatedly warned that trading in digital
payment tokens (DPT), or cryptocurrency, is highly risky and not suitable for
the general public, as they are subject to sharp speculative swings.
The new guidelines clarify the expectations of MAS that companies should not
engage in marketing or advertising of DPT services in public areas in Singapore
or through the engagement of third parties, such as social media influencers, to
promote DPT services to the general public.
They can only market or advertise on their own corporate websites, mobile
applications or official social media accounts.
"MAS strongly encourages the development of blockchain technology and innovative
application of crypto tokens in value-adding use cases," Loo Siew Yee, MAS
Assistant Managing Director (Policy, Payments and Financial Crime), said in a
statement.
"But the trading of cryptocurrencies is highly risky and not suitable for the
general public. DPT service providers should therefore not portray the trading
of DPTs in a manner that trivialises the high risks of trading in DPTs, nor
engage in marketing activities that target the general public."
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IPO-BOUND INDIA1 PAYMENTS AIMS TO DEPLOY 20,000 ATMS IN NEXT 4-5 YEARS
"The hike in interchange fees by RBI coupled with various structural growth
drivers, including expected increase in cash withdrawal transactions, will
accelerate White Label ATMs deployments in the country," he said.
* PTI
Click Here to Read This Story
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IPO-bound India1 Payments Ltd, which is currently rolling out 300-400 ATMs in a
month, is hopeful of deploying over 20,000 such machines in next 4-5 years to
ensure cash availability to customers in semi-urban and rural areas, its MD and
CEO K Srinivas said on Sunday.
"The hike in interchange fees by RBI coupled with various structural growth
drivers, including expected increase in cash withdrawal transactions, will
accelerate White Label ATMs deployments in the country," he said.
The ATMs which are set up, owned and operated by non-bank entities are known as
White Label ATMs (WLAs).
At present, the Bengaluru-headquartered company operates a network of 10,300
WLAs and deploys its ATMs under the brand name of "india1ATMs".
It is the second largest ATM brand in the semi-urban and rural areas after State
Bank of India (SBI).
India1 Payments, promoted by the Banktech Group of Australia and formerly known
as BTI Payments, has installed these machines mostly in semi-urban and rural
areas across 14 states and union territories.
"In the calendar year 2021 India1 has rolled out in excess of 3,000 ATMs and
likely to continue at the same pace in next 4-5 years given the low penetration
of ATMs in semi-urban and rural India. That should put India1 in good stead to
be a large ATM network with over 20,000 ATMs," Srinivas told PTI.
He further said the company will continue to focus on states like UP, Bihar and
West Bengal which has low penetration of ATMs.
The company focuses on ensuring availability of cash in its ATMs, especially
those located in rural areas.
"We are mindful that when a customer comes to our ATMs in rural areas after
travelling 8-9 kms then he should be able to withdraw money," he said.
Srinivas said the company may consider deploying ATMs in the northeast region
next year. Currently, the company has no presence in the area.
"We are committed to improving financial inclusion through accessibility of our
ATM services in the under-penetrated semi-urban and rural areas of the country,"
he said.
According to the latest data from the RBI as of September, there were 2.4 lakh
ATMs in the country, of them around 28,000 are white-label machines.
The company has grown over 15 per cent over last year and accounts for more than
50 per cent of incremental ATMs deployed in this period.
It services over 72 million customer transactions and facilitates a gross
transaction value of over Rs 13,600 crore every quarter on an average.
On the company's future growth strategy, Srinivas said the company will continue
to expand ATM network in semi-urban and rural regions, improve local operational
capabilities and drive profitability through customer engagement and cost
optimization. In addition, the company will focus on offering the micro-ATM
services in remotest areas among others, he added.
India1 Payments, promoted by Banktech Group, was incorporated in the year 2006
and subsequently invested by ICICI Ventures in 2013.
The company, which has already received Sebi's go-ahead to float initial
share-sale, plans to come out with its public issue in coming months.
The initial public offering (IPO) comprises fresh issuance of equity shares
worth Rs 150 crore and an offer of sale (OFS) of 1.03 crore equity shares by
promoters and investors.
The OFS consists of sale of 1 lakh equity shares by the Banktech Group, up to
25.08 lakh equity shares by BTI Payments Singapore, up to 49.94 lakh equity
shares by India Advantage Fund S3 I, up to 24.86 lakh equity shares by India
Advantage Fund S4 I and up to 2.16 lakh equity shares by Dynamic India Fund S4
US.
Proceeds from the fresh issue will be utilized to repay debt, for funding
capital expenditure requirements of the company, setting up of ATMs in India and
general corporate purposes.
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ASIA’S 1ST CRYPTO ETF MAY ROLL OUT IN GIFT CITY
Torus Kling Blockchain IFSC, a joint venture between Mumbai-based Cosmea
Financial Holdings and Hyderabad-based Kling Trading India, has signed an MoU
(memorandum of understanding) with BSE’s international arm India INX to launch
digital asset-based products, which will be traded in GIFT City’s IFSC
(international financial services centre).
* Partha Sinha
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* Aseem Gujar
* TNN
Click Here to Read This Story
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MUMBAI: Asia’s first cryptocurrency exchange-traded fund (ETF) could be launched
in India’s GIFT City this year.
Torus Kling Blockchain IFSC, a joint venture between Mumbai-based Cosmea
Financial Holdings and Hyderabad-based Kling Trading India, has signed an MoU
(memorandum of understanding) with BSE’s international arm India INX to launch
digital asset-based products, which will be traded in GIFT City’s IFSC
(international financial services centre).
The development comes after the US securities regulator SEC in October 2021
allowed launch of a crypto futures ETF, the first such in the US. ETFs like
these track returns from cryptocurrencies without investing directly in the
digital tokens.
The Torus Kling crypto futures ETF will be launched in a sandbox environment,
which is under GIFT regulatory authority IFSCA. Such a sandbox allows regulated
entities to launch and live-test products under strict controls so that any
emerging risks or faults could be quickly corrected before it affects many
investors.
Once the Torus Kling ETF obtains regulatory nod, Indians will be able to invest
in this ETF using the RBI’s liberalised remittance scheme (LRS) route. Global
investors, who have similar options in the US and Switzerland, will have another
alternative to invest through the regular process.
According to India INX’s MD & CEO V Balasubramaniam, the exchange is looking at
launching digital asset-based products and has already made an application to
IFSCA under the regulatory sandbox. “This is part of our product innovation
initiative to benchmark offerings with other international finance centres,” it
said. India INX plans to launch more such products.
According to estimates, global annual derivatives trading volume in the
cryptocurrency market is about $3.2 trillion, while total spot volume is at
approximately $2.7 trillion. According to Torus Kling Blockchain IFSC’s CEO
Krishna Mohan Meenavalli, this type of new asset class is just the tip of the
iceberg. “ETFs allow trading through regular investment accounts, bypassing the
hassle and security concerns of cryptocurrency exchanges,” he said.
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MUTUAL FUND ASSETS SEE RECORD GAINS IN 2021, EQUITY FUNDS GARNER LION'S SHARE
Mutual funds added Rs 6.70 lakh crore — a record absolute asset gain for any
calendar year on record, with the previous peak being Rs 4.80 lakh crore in 2017
* Sunainaa Chadha
* TIMESOFINDIA.COM
Click Here to Read This Story
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NEW DELHI: Assets under management (AUM) of the domestic mutual fund industry,
excluding fund of funds (FoF), closed at a record Rs 37.73 lakh crore, with
equity-oriented funds cornering the lion's share as opposed to 2020 which had
seen sharp inflows into debt-oriended funds, according to Crisil Research.
Mutual funds added Rs 6.70 lakh crore — a record absolute asset gain for any
calendar year on record, with the previous peak being Rs 4.80 lakh crore in
2017, followed by Rs 4.5 lakh crore in 2020.
In percentage terms, the industry gained 22% compared with 17% in 2020.
2021 saw investors put a larger amount of their money in equity-oriented mutual
funds, drawn by the strong gains in the underlying equity market. Equity mutual
funds saw net inflows of Rs 91,000 crore, while passive funds got Rs 1.14 lakh
crore and hybrid funds Rs 1.02 lakh crore. Passive funds and hybrid funds
benefitted from a spate of new fund offers, at 41 and 8 funds, respectively.
Debt mutual funds, on the other hand, saw net outflow of Rs 35,000 crore in 2021
as investors stayed away from the category amid a fall in returns and as
investors waited on the side lines, monitoring probable interest hikes by the
Reserve Bank of India, noted the report.
In 2020, open-ended debt-oriented mutual funds saw inflows of Rs 2.01 lakh crore
while equity-oriented funds saw net inflows of just Rs 9,100 crore. Hybrid funds
also took a beating with an outflow of over Rs 53,000 crore. However, passive
funds continued to garner money, amounting Rs 62,000 crore, led by flows from
institutional investors such as the Employees’ Provident Fund of India (EPFO).
SIP inflows make new calendar year, monthly records
The industry logged net inflows of Rs 1.14 lakh crore in 2021 through systematic
investment plans (SIPs), crossing the Rs 1 lakh crore mark for the first time in
any calendar year since AMFI started declaring this data. December 2021 also saw
SIP flows come in at their record monthly high of Rs 11,300 crore, after
crossing the Rs 11,000-crore mark for the first time in November 2021.
The number of SIP accounts rose to 4.91 crore, accounting for Rs 5.65 lakh crore
of the industry’s assets as of December.
ETFs become the largest MF category while liquid funds lose sheen
Benefitting from the strong inflows from the EPFO and other pension trusts,
together with new launches and individual investor interest, assets of
exchange-traded funds (ETFs) surged to overtake liquid funds as the largest MF
category in 2021. ETFs closed 2021 with assets of Rs 3.84 lakh crore compared
with Rs 3.61 lakh crore for liquid funds.
Liquid funds lost sheen as their returns dipped in line with low interest rates,
making other money market MF categories more attractive for investors with
higher risk appetite.
Floating-rate, target maturity and ESG funds gain traction
2021 saw floating-rate debt funds and passively managed debt funds in the form
of target maturity funds gain traction within the industry. On the equity front,
there was increasing traction in the environmental, social and governance (ESG)
space, as the theme of ‘conscious investing’ became popular among investors.
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DIGITAL COINS ISSUED BY INDIAN EXCHANGES TO EMPLOYEES TO FACE INCOME TAX
COMPLICATIONS
Many exchanges have rolled out their own tokens and offered these as part of
their employees' annual income—along the lines of employee stock ownership plan
or esop. In some cases, it was also linked to employee performance.
* Sachin Dave
* ET Bureau
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Cryptocurrencies or digital assets issued to employees by crypto exchanges as
incentives are set to come under the taxman’s lens.
The question is whether the coins—most of them issued by Indian exchanges—can be
construed as income and what could be the income tax applicable on the digital
assets.
Many exchanges have rolled out their own tokens and offered these as part of
their employees' annual income—along the lines of employee stock ownership plan
or esop. In some cases, it was also linked to employee performance.
Tax experts say while the arrangement may look similar to an esop, it will not
be treated as one under the tax laws.
"Cryptocurrency or coins given to employees are nothing but salary and shouldn’t
be equated to esops as these have liberal interpretation and leeway when it
comes to income tax,” said Sudhir Kapadia, national leader-tax, EY India. “These
coins should face normal income tax, too, on their actual market price in the
year the employee received them.”
This could mean that the tax department would tax these coins in the year as per
their market value.
Over the last two years, the value of these coins has gone up substantially,
along with other established cryptocurrencies such as Bitcoin and Ethereum.
Industry trackers say issuing tokens as incentives to employees is gaining
popularity among startups and crypto exchanges.
"Token incentives are attractive to the employers as it doesn’t dilute their
shares and is also quite popular among the employees since the tokens could
significantly increase in value,” said Praveen Kumar, CEO at Belfrics Global, a
cryptocurrency exchange. “Due to the smart contract capability of crypto assets,
multiple structures and combinations can be achieved to issue restricted and
non-restricted tokens. When startups use their project tokens for employee
compensation, many of the crypto exchanges use their own exchange tokens for the
said purpose."
Tax experts say the income tax, however, will only be triggered in the year when
the employee actually gets the money.
"Of course, if there is an element of deferred compensation as per contract,
then the incidence of taxation will be shifted to a future date depending upon
the contractual terms," said Kapadia.
This comes at a time when the government is looking to fix the income tax rate
for cryptocurrency investors in the upcoming budget. Money earned from trading
or investing in cryptocurrencies will be treated as business income as against
capital gains from this year onwards as the government looks to fine-tune
definition of income and gains specifically for crypto assets in the upcoming
budget, ET wrote on Wednesday.
This would mean that the income tax on returns for investors or traders could be
as high as 35% to 42% going ahead.
Top cryptocurrency exchanges and the coins they issue have already come under
the taxman’s lens recently.
The indirect tax department claims many exchanges issued their own
cryptocurrency but did not pay GST on that. The tax department contended that
GST of 18% is applicable on the coins that were sold on the exchange.
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HERO ELECTRIC PARTNERS WITH SHRIRAM CITY UNION FOR FINANCE SOLUTIONS
"The changing market scenario and increased preference for the electric vehicle,
we have realized the need for strong finance schemes to boost the EV shift. Easy
and preferred financing schemes will further favour the green mobility shift
leading to a seamless ownership experience," Hero Electric CEO Sohinder Gill
stated.
* PTI
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Hero Electric on Thursday said it has tied up with Shriram City Union Finance to
facilitate loan schemes for its electric two-wheeler buyers. The collaboration
aims to make the e-scooters more affordable and attract cost-conscious buyers
with attractive financing solutions, Hero Electric said in a statement.
The partnership will enable customers to avail a fully digital and paperless
loan procedure with on-the-go financing options available 24 hours across the
country, it added.
"The changing market scenario and increased preference for the electric vehicle,
we have realized the need for strong finance schemes to boost the EV shift. Easy
and preferred financing schemes will further favour the green mobility shift
leading to a seamless ownership experience," Hero Electric CEO Sohinder Gill
stated.
The association will promote easy accessibility and availability of innovative
financial products to customers at the best rates and minimum documentation, he
added.
"The demand drivers for EVs are the rapid urbanisation, high cost of petroleum
products, the growing sentiment for pollution control, rising need for social
distancing, along with favouring policy. We are partnering with the best and are
pleased to announce a partnership with Hero Electric," Shriram City MD and CEO
YS Chakravarti noted.
The shift to electric mobility has become inevitable and Shriram City's
financing options will make EV adoption easier, he added.
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WHEN MADURAI, NOT MUMBAI, STARTS TALKING ABOUT CARDANO
In India’s small cities and towns, a generation that has hardly had any
experience with stocks and bonds is talking Bitcoin, Ethereum, Cardano. About
83% of urban Indians are aware of digital currencies, while 16% actually own
them, according to Kantar, a data analytics firm. India may be wary but that
number offers a glimpse of what portfolios of the future will look like.
* ET CONTRIBUTORS
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How should crypto products be treated? How should they be brought under the tax
net? What happens in case there is a major shakeup in the crypto market
resulting in small investors losing money? How to make sure they are not being
used for illicit activities?
More questions are swirling around cryptos than there are answers. However,
considering the size that they have attained, the technology underlying them and
the many benefits associated, a complete ban looks highly unlikely. While
reports suggest some in the government are in favour of regulating it, the RBI
has stood its ground on banning crypto products.
The recent raids are also seen positively as these continue to add clarity in
the unregulated market. Given, the winter session did not bring any clarity on
crypto assets, we are now looking for some guidelines through the budget.
However, the chances remain slim.
Cryptos will stay
As long as the internet is going to stay, the crypto-assets are going to stay.
Crypto assets are based on a technologically advanced concept called
cryptography. Not just crypto assets but also a lot of networking, transaction
and national & international security protocols use cryptography to send
information. With keys and cypher codes, the information or data can only be
received and understood by the recipient. A lot of technologists, coders,
scientists and security personnel realize the value of this and believe in it.
For them, crypto assets are the ideal way to transfer information related to
finances.
Those who have no understanding or interest in cryptography, blockchain
technology, or decentralization, but are game players in the financial world,
also tend to try their hands in these new-age assets. Exchanges and trading
platforms come into the picture here.
For those who neither come from a technical background nor a trading background,
but would want to solve some major world financial problems, for them too, these
crypto-assets come to the rescue.
Finally, civilians and taxpayers of any country, at the end of the day, would
like to make some money. For that class of people too, crypto-assets have been a
hot topic. People like to know how bitcoin has increased in price, why the price
fluctuates, and how some people are getting amazing results by intelligently
investing in it.
The road ahead
Crypto assets are going to stay. Laws and regulations will only regulate the way
the transactions would be carried out. A forceful outright ban will push crypto
activity underground and none of the regulators wants it that way. Remember
demonetisation? The then central government came out with the law that the
previous currency note will not be considered as a legit value. But did that
mean people stopped paper-note transactions? No. There were alternatives as to
transfer money via IMPS/NEFT/Bank transfer, card swipes and the then-popular UPI
transfers. New currency notes were being introduced to the market too. People
transacted the same way after a month after demonetisation as they did before.
The law promoted more people to get banked, link their Aadhaar, do digital
payments and go cashless.
The new bill might have a similar impact on how the use of crypto assets will be
carried out. All that the government wants is to regulate the use of
crypto-assets. The expectations from exchanges are that they trace, record and
share every transaction detail that happens on their platform. The government
also wants to make sure there is no illicit buying and selling of weapons,
illegal activities, money laundering, terrorist activities happening which could
be a major tragedy for the nation's security. Shutting doors to crypto-assets
would be like shutting doors to the future. Crypto-assets, as a technology, have
something for everyone. It is not merely something that resembles gambling or
unlawful activities.
What will be the future of crypto products in India?
There is an expectation that the government will adopt a middle path on crypto
products and treat them as a form of asset that will come under Sebi. Sebi has
been assigned to form regulatory norms for all the exchanges & brands that
encourage crypto-assets transactions on their platforms. The government also
plans to launch its digital currency that would directly come under the Reserve
Bank of India (RBI). In that case too, as mentioned above, all we see is a shift
of which assets can be used freely and which assets require scrutiny or tighter
laws.
Moreover, as easy as regulating crypto-assets may seem, it is not going to be a
cakewalk. It took almost half a century for our government to regulate
census-related data via a single ID system called Aadhaar. The same amount of
time was needed to bank every Indian citizen. After the advent of the internet
in the late '90s, it took almost two decades for our government to move people
from cash-based transactions to internet-based transactions. So as long as there
is no complete ban on crypto products, the crypto-assets are going to stay for
long.
What will be on the minds of an average crypto investor right now?
Most average Indians are talking about it. The average Indian might halt for
some time to invest any more money into assets. But chances of encashing or
liquifying their long-held assets seem to be minimal as the government's stand
is not fully clear yet.
Those who are pro-investors would continue to trade as per their discretion and
market fluctuation while keeping an eye on the NEWS around the bill.
And how smooth does the journey look for cryptos in terms of navigating
regulatory roadblocks?
It majorly depends on Sebi officials. Sebi has not been so proactive and
welcoming to the idea of it being considered as a regulatory body for cryptos.
This is very new for them. This is new for India.
Taking a middle ground seems to be way too challenging. We are almost as densely
populated as China but have not banned any assets as of now.
On the other hand, we also have not accepted crypto assets as openly as El
Salvador, which would have made our lives fairly simpler. So considering that we
have not been on either of the extremes (unlike China and El Salvador), the
journey for cryptos in terms of navigating regulatory roadblocks doesn't seem to
be smooth, but achievable.
(The author is co-founder & CEO, Unocoin Technologies Private Limited)
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COINDCX APPOINTS DIVAKAR PRAYAGA AS SENIOR VP AND HEAD OF INFORMATION SECURITY
In this role, Prayaga will steer CoinDCX’s information security strategies and
governance processes and spearhead an inclusive and comprehensive data
protection programme to support development, research, and administrative
information systems and technology.
* ETHRWorld
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CoinDCX, a crypto unicorn, has appointed Divakar Prayaga as Senior Vice
President and Head of Information Security. In his new role, Prayaga will play a
key role in building, scaling and sustaining CoinDCX’s security systems.
Prayaga will also steer CoinDCX’s information security strategies and governance
processes and spearhead an inclusive and comprehensive data protection programme
to support development, research, and administrative information systems and
technology.
At the same time, Prayaga will chair the Information Security Advisory Committee
and lead the Information Security Liaisons, championing information security
within the crypto and blockchain industry, according to a statement.
Before joining CoinDCX, Prayaga was Head of Cyber Defence at Flipkart. He has
also served as Vice President of Cybersecurity at Wells Fargo. Prayaga has an
extensive career building and scaling information security and cybersecurity
protection for companies like Wipro, Unisys, and IBM, as per the statement.
Neeraj Khandelwal, Co-Founder, CoinDCX, said, “In the digital first world of
crypto and blockchain, information security is critical to ensuring customers
enjoy uninterrupted access to digital assets and a safe trading experience.”
“Divakar will be the lynchpin in advancing CoinDCX’s security systems and
furthering our position as India’s safest crypto exchange, fostering a security
first approach for the sector at large,” Khandelwal added.
Divakar Prayaga, Senior Vice President and Head of Information Security,
CoinDCX, said, “With crypto being at the forefront of the future of finance, I
am thrilled to step into an exciting sector to enhance CoinDCX’s security
posture and contribute to the industry’s developing information security
landscape.”
“As the crypto and blockchain industry is underpinned by digital technologies,
information security is more paramount than ever to protect customers and
companies alike from cyber-attacks and exploits. I am delighted to join the
nation’s leading powerhouse and to bring my experience to strengthen safety and
security standards for the ecosystem,” Prayaga added.
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ANICUT CAPITAL RAISES RS 875-CR FOR SECOND DEBT FUND
The second debt fund is being closed at Rs 875 crore with successful investments
across over 12 early-stage startups, with an average deal size of Rs 15-100
crore, a statement said.
* PTI
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New Delhi, Anicut Capital on Wednesday announced the successful closure of its
second debt fund, Grand Anicut Fund - 2 (Category II Alternative Investment
Funds) at Rs 875 crore. Anicut secured SEBI approval for its second debt fund -
Grand Anicut Fund 2 (GAF -2) - of Rs 700 crore with a green shoe option to raise
additional Rs 300 crore.
The second debt fund is being closed at Rs 875 crore with successful investments
across over 12 early-stage startups, with an average deal size of Rs 15-100
crore, a statement said.
The fund plans to invest in about 30 early/growth stage companies across sectors
such as consumer brands, technology, F&B, fintech, among others under categories
of acquisition financing, promoter/buyback financing, growth capital and capital
restructuring, it added.
Portfolio companies of GAF-2 includes Wow Momos, ASG Eye Care Hospital, Akna
Medical (acquired by Pharmeasy), B9 Beverages (Bira), Azure Hospitality, and
Wingreens of which BSB and Wingreens have already seen successful exits.
Additionally, the company intends to launch diversified funds in the future,
including equity funds, financial institution based debt products and
accelerator programs in collaboration with the premier institutions of the
country, the statement said.
"Anicut is the lender of choice for early stage/first generation companies as we
provide speed of execution and flexibility which banks and NBFCs cannot provide.
Dependent on the projected future cash flow of the company, we foresee
investments into startups and firms that find challenges in fund accessibility.
Through our continuous efforts, we are channelising synergies and focus to offer
competitive advantages and support to the startups," I A S Balamurugan,
co-founder and Managing Partner of Anicut Capital, said.
On the successful closing of the fund, Anicut Capital co-founder and Managing
Partner Ashvin Chadha said GAF-2 has established a niche for itself in the field
of acquisition financing and has already invested about Rs 500 crore in various
pioneering and promising startups.
"We are excited to share that we also have a robust pipeline of slated deals
that are undergoing due diligence of evaluation and assessments from our end and
we shall be announcing them in the due course of time. In the next two quarters,
the 2.0 version of Grand Anicut Fund will invest in diverse upcoming entities
across various sectors like technology, consumer goods, financial services,
education, healthcare and others," he added.
Founded in 2016, Anicut Capital LLP is an AMC managing 2 debt and an angel fund.
The team has worked on about 140 primary investments and another 70-80
investments which involved subsequent follow-on rounds and has offices in
Chennai, Delhi and Bengaluru. Anicut has an Assets Under Management (AUM) of Rs
1,500 crore across three funds. PTI SR MKJ
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