46436 - India BEF IV

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Summary of Investment Information

Project Number

46436

Company Name

INDIA BUSINESS EXCELLENCE FUND IVG

Date SPI Disclosed

Apr 25, 2022

Country

India

Region

South Asia

Projected Board Date

Jun 9, 2022

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Jan 10, 2024

Department

Equity Portfolio Management

Industry

Funds

Previous Events

Approved : Jun 9, 2022
Signed : Jun 30, 2022
Invested : Oct 11, 2022

Sector

Growth Equity Fund

Project Description

IFC proposes an equity investment of up to US$35 million, not exceeding 20% of total Commitments with up to US$20 million in co-investment envelope under the delegated authority, in India Business Excellence Fund IV (the “Master Fund” or “IBEF IV”), a trust constituted under the Indian Trusts Act 1882 and registered as a Category II Alternative Investment Fund (“AIF”) with the Securities and Exchange Board of India (“SEBI”) through India Business Excellence Fund IV G (“GIFT Fund”), a trust formed in Gujarat International Finance Tec-City, registered with the International Financial Services Centre Authority (“IFSCA”) under the SEBI AIF Regulations 2012, as a Category II AIF (together known as the “Fund”). The Master Fund is targeting ~US$588 million (INR 45,000 million) in commitments to invest in 10-15 companies in consumer, financial services, life sciences and niche manufacturing sectors.

Associated Advisory Engagement

N/A

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	55.0

Development Impact

Project level outcomes are delivered through increasing access to equity and value creation for mid-cap companies in India with a focus to also support companies with a scope for expanding significant operations in low-income states. MOA is an experienced fund manager and will support value creation in its investee companies through operational improvements by leveraging its in-house team of experts, in turn, positioning companies for market expansion across India. Market creation is delivered by strengthening the competitiveness of the private equity (“PE”) market in India. The project supports an experienced fund manager to raise a follow-on fund in the mid-cap market segment. Beyond the project, the success of the Fund will encourage other local fund managers to raise new or follow funds in the segment. In turn, this will attract domestic and international institutional investors and is expected to reduce the need for development financial institution (“DFI”) presence in the market for future fundraisings

IFC’s additionality is both financial and non-financial. Financial additionality consists of IFC's provision of equity as part of the subsequent close and bringing in institutional capital to help the Fund Manager achieve its fundraising target. Non-Financial additionality involves support to the Fund Manager to adopt gender lens investing standards and support the Fund Manager to set up a process for collecting gender-disaggregated data from the Fund and its portfolio companies.

E&S Category Rationale / Risks and Mitigation

The project entails up to US$35 million equity investment in the Master Fund, through the GIFT Fund, and a co-investment envelope for an amount of up to US$20 million in potential co-investments in the Fund’s portfolio companies. The key sectors that the Master Fund will invest in include consumer goods (e.g. personal hygiene products, food and beverages, cosmetics, apparel, consumer durable etc.), financial services (e.g., supply chain financing platform, small to mid-sized banks, lending, insurance, technology driven online and mobile app based payment platforms etc.), healthcare related services (e.g., nutraceuticals, pathological diagnostic service chain, Specialty hospitals like eyecare, dental etc., formulations, active pharmaceutical ingredients, medical devices etc.), and manufacturing (e.g., industrial and auto components, electronics/ hardware, building materials / equipment etc.). Most of the environmental and social risks and impacts of these industry sectors will be few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures and good industry practices. The main E&S risks and impacts of the project derive from the E&S risks associated with the fund's sub-projects/portfolio companies. The typical risks areas will include labor and working conditions, occupational health and safety, supply chain risk, air emissions, waste management, handling of hazardous materials, and management of third party/contractors. The Master Fund will not invest in any higher risk business activities that may include a) involuntary resettlement, b) risk of adverse impacts on indigenous peoples, c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage d) significant occupational health and safety risks. The Master Fund will also not invest in any coal related activities, or any financial institution substantially exposed to high-risk sectors. Hence, the E&S risk of the proposed investment is medium, and the project is categorized as FI-2 according to IFC’s Policy on Environmental and Social Sustainability. IFC’s applicable performance requirements for this project will be i) the Exclusion List; ii) the host country laws and regulations; and iii) the IFC Performance Standards. IFC will review the first three ESDDs before the Fund makes the investment, or before pro-rata contribution is made by IFC in case of investments already existing prior to IFC's participation in the Fund.

In accordance with IFC's Access to Information Policy, IFC will periodically disclose the names, locations and sectors of sub-projects that have been supported by IFC investments through private equity funds, subject to regulatory constraints and market sensitivities. The sub-project(s) listed below reflect(s) the status of the portfolio as of January 1, 2025.

Investee	Country Of Investment	Sector
Asian Footwear	India	M-EA- Miscellaneous Consumer Products (Including Sporting Goods and Equipment, Soap and Cleaning Materials Mixing, Packaging and Distribution, Toys, Games, Other)
HealthKart	India	M-EA- Miscellaneous Consumer Products (Including Sporting Goods and Equipment, Soap and Cleaning Materials Mixing, Packaging and Distribution, Toys, Games, Other)
IGP	India	M-EA- Miscellaneous Consumer Products (Including Sporting Goods and Equipment, Soap and Cleaning Materials Mixing, Packaging and Distribution, Toys, Games, Other)
IKF Finance	India	O-CA- Finance Companies
Kreditbee	India	O-FA- Other Non-Banking Financial Institution (NBFI)
Lal Sweets	India	F-AI- Other Food
Mega Fine Pharma	India	G-FA- Pharmaceuticals and Medicine Manufacturing
Niva Bupa	India	O-JB- General Insurance (Non-Life)
PAN Healthcare	India	J-AD- Pulp and Paper Hygiene Products (Tissues, Diapers, Wipes, Feminine Care, Nonwovens, etc)
Pathkind Diagnostics	India	S-AC- Other Health Services
Simpolo	India	M-EA- Miscellaneous Consumer Products (Including Sporting Goods and Equipment, Soap and Cleaning Materials Mixing, Packaging and Distribution, Toys, Games, Other)
SK Finance	India	O-FA- Other Non-Banking Financial Institution (NBFI)
VVDN	India	M-BB- Computer & Electronic Products(Computers & Peripherals, Communications Equip., Elec. Watches & Similar Elec. Products. Integrated Circuits & the application of Miniaturization Technologies characterize this sector.)

The Fund Manager is an existing client with a satisfactory ESMS in place and an E&S officer responsible for implementing the ESMS. The ESMS was developed as part of IFC investment in Fund II. The ESMS details the policy, procedures, screening mechanisms and workflows that needs to be followed for all eligible investments. It also lays down criteria and guidelines for conducting E&S due diligence (ESDD) and periodic supervisions for the portfolio companies. The Fund manager engages qualified third-party E&S consultants to conduct the ESDD and to monitor the implementation of corrective actions by the portfolio companies. The consultant also provides implementation support, if needed. The level of ESMS implementation is satisfactory for the E&S risk associated. As part of current investment, the Fund Manager will formalize an external communication mechanism (ECM) as part of ESMS upgrade.

Contacts

For Inquiries About the Project, Contact

MO Alternate Investment Advisors Pvt. Ltd.
Bharat Kedia
Chief Operating Officer

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IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

Task Title & Description	Anticipated Completion Date
Formalize procedures	06/28/2022

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