Star Indian start-up founder Nikhil Kamath to woo cash-rich Gulf-based NRIs with new $200m India-focused fund

The new fund – christened True Beacon II – is to be launched in a week’s time and will have an entry level investment requirement of minimum $1m.

“It [the new fund] will be an on-shore India fund and we are targeting to rope in 15-20 percent of NRIs in this,” Kamath, co-founder and chief investment officer of True Beacon, told Arabian Business in an exclusive interview.

Both expat Indians and local market savvy investors have been a mainstay of True Beacon’s two global funds.

“Though it will be an open-ended fund, we expect to raise up to $200m over a period of time,” said Kamath, who is also the co-founder of Zerodha, a leading trading platform start-up which shot to fame for achieving unicorn status without any external investment.

The school drop-out-turned-billionaire entrepreneur’s strategy to woo Gulf-based NRIs for his new fund is not surprising as high net worth (HNI) investors from the Middle East – both expat Indians and local market savvy investors – have been a mainstay of True Beacon’s two global funds – True Beacon Fund One and True Beacon Global.

In fact, True Beacon Global, launched in April, gained good traction with Middle East investors, with the fund reporting a 20 percent month-on-month growth in the initial period. 

“We are seeing a slight slowdown in participation [from the Middle East] currently as we couldn’t hold our proposed roadshows in Dubai and other places in the region because of travel restrictions. We will now hold investor meets in the region for both our new fund and the True Beacon Global once the flight services to the UAE resume,” Kamath said.

“As for equity investments, we will be targeting the 200 largest companies by market caps, while our debt plans will mostly focus on the highly safe tax-free bond issues,” Kamath revealed.

He also said that although the long-term plan is to have an equity-debt investment ratio of 65:35, the True Beacon team will follow an active ‘re-balancing’ approach for the new fund.

The ace investor’s comments come in view of the uncertain nature of the stock market, especially in the current context of a highly divergent direction of the South Asian country’s major macroeconomic indicators and the mostly bullish equity market performance.

Zomato, the food delivery unicorn, hit the market last month with a $1.26bn IPO.

The timing of True Beacon’s decision to launch an India-specific investment fund is widely believed to be a strategic move to cash in on the current investor frenzy for a slew of initial public offerings (IPOs) by start-ups, besides a massive government stake sale programme in several public companies and banks later this year.

While Zomato, the food delivery unicorn, hit the market last month with a $1.26bn IPO which received a stellar response from investors with the offer getting subscribed 38.25 times, at least seven more Indian start-ups – all unicorns – including digital payment venture Paytm and ride hailing venture Ola are currently readying their IPO plans and are to hit the market over the next few months. 

Online insurance aggregator PolicyBazar, logistic venture Delhivery, digital payment firm Mobikwik, online beauty and wellness products venture Nykaa and online furniture firm Pepperfry and among the other Indian startup unicorns which are slated to hit the market with IPOs over the next few months.

The Indian government has also announced a massive disinvestment plan of over $28 billion in the current fiscal year, which will include a massive IPO from the country’s largest insurer, Life Insurance Corporation (LIC) of India.