The National Investment and Infrastructure Fund (NIIF), which usually makes infrastructure investments and Limited Partner commitments to third-party private equity and venture capital funds in India, is placing its first direct bet on the digital economy.
NIIF, a quasi-sovereign fund manager of India, via its direct private equity fund–the NIIF Strategic Opportunities Fund (SOF)—is investing in Brainbees Solutions Pvt Ltd, the firm behind omni-channel retail network for kids FirstCry.
NIIF has received deemed approval from the Competition Commission of India for the deal.
The investment firm is yet to officially announce the deal but a previous report had said NIIF was set for a secondary transaction worth $150-200 million for a stake in FirstCry, valuing the latter at around $2 billion. This is the same level at which TPG, ChrysCapital and PremjiInvest invested in the venture recently. FirstCry also counts SoftBank among others as its backer.
This is the third known transaction by the SOF. Last year, it had invested $287 million in TPG-backed Manipal Hospitals.
It had also committed capital to create a financial services platform with two complementary non-banking finance companies—NIIF Infrastructure Finance (NIIF IFL) and Aseem Infrastructure Finance (AIFL), together constituting NIIF Infrastructure Debt Financing Business.
NIIF IFL provides takeout financing to operating infrastructure assets enabling the original project financiers to recycle their capital. SOF is the controlling shareholder in NIIF IFL, which is now an infrastructure debt fund led by Sadashiv Rao.
AIFL, led by Virender Pankaj, was incubated by SOF to lend across the project life cycle.
The SOF invests through both active minority stakes and control-oriented/incubation deals. It was established to build a portfolio of large entrepreneur-led or professionally managed domestic companies including unicorns or startups with a valuation of $1 billion or more.
It focuses on sectors such as financial services, food and agriculture, healthcare and education.
Overall, NIIF manages more than $4.5 billion of equity capital commitments across a Master Fund, a Fund of Funds and SOF. The NIIF Master Fund mainly invests in operating assets in core infrastructure sectors such as transportation and energy. The Fund of Funds invests in private equity and venture capital funds as an LP.