The fund with a target size of $750 million, with an additional green-shoe option of $150 million
IFC, a member of the World Bank Group, has signed an agreement to invest $60 million (₹516 crore) in India Business Excellence Fund VG managed MO Alternates.
IFC’s investment in the fund will be along with an additional $60 million co-investment envelope that will allow IFC to selectively invest alongside the fund in future deals.
The fund with a target size of $750 million (with an additional green-shoe option of $150 million) will identify and support 12 to 16 mid-market companies with high growth potential, especially companies that can extend services beyond India’s major cities to low-income states.
In addition to providing capital, IFC will help the fund manager improve women’s participation in the workforce at investee companies through workshops and standard setting.
Growth capital
Vishal Tulsyan, MD and CEO, Motilal Oswal Alternates said the fund will provide growth capital to companies across India, including the distant tier-II and -III cities.
IFC’s investment will encourage other local fund managers to raise funds that include investments in underserved regions and attract greater commercial institutional investors into the segment, he added.
Mid-market companies play a crucial role in India’s economic development, but they often lack access to formal credit, especially during economic downturns.
Increasingly, private equity is helping address the funding gap by providing capital and management expertise to help the companies expand, create jobs, and strengthen financial sustainability.
Mohamed Gouled, Vice President of Industries, IFC, said the investment aims to leverage private capital and solutions to boost job creation, promote inclusive and sustainable growth, and support India’s transition to a higher middle-income country.
Equitable access
It is critical to provide capital to companies in this mid-market segment to help India maintain economic growth to absorb additional employment and equitable access to opportunities, he added.
This is IFC’s third fund engagement with Motilal, after investing $25 million in its second and $35 million in its fourth fund. IFC also co-invested $10 million alongside the fund manager in VVDN, an electronics manufacturing company.
To date, MO Alternates has invested $1.1 billion in 50 companies.
Published on June 16, 2025