Private Equity Business India u the magazine of the corporate world

san slowly building a team in Para- j a

y b gon since 2016. They have roped

orade in Tariq Ahmed (who has over 16 years of experience spanning invest- ment banking, private equity invest- ing and corporate m&a) as m d of the company. Before moving to Paragon, Ahmed was global head, m&a, , where he completed nine acquisi- tions, while also establishing the company’s entry into the US through a $550 million acquisition. Prior to Cipla, he was vp, General Atlan- tic. “We are targeting companies with differentiated market positions, strong profitability, free cash flows, diverse customers, and proven man- agement teams,” says Ahmed, who now heads a team of 10. Nindrajog, Lalpuria, He has also convinced Nitin Ahmed and Parekh: Lalpuria, his colleague from active investors Cipla, to join Paragon as prin- cipal. Lalpuria, with over 13 years of experience in build- ing businesses and managing Pipeline of deals cross-functional teams across large Experienced promoters and an illustrious advisory corporates, top-tier management con- board put Paragon Partners ahead in the race sulting firms and high-tech start- ups, was with Cipla as head, strategy, US business. iddharth Parekh and Sumeet Before teaming up with Parekh in Ahmed and Lalpuria, key members Nindrajog, two young invest- Paragon, Nindrajog was co-founder & of the Paragon team, have been cher- Sment bankers, have much in ed, Hover Automotive India. He too ry-picking the targets, looking and common. For one, they were room- has experience in investment in his weeding out proposals at an average mates at the University of Pennsylva- earlier stint at Ares Management in of three per day. Besides this frontline nia till 2001. Also, they now share the its private equity group in Los Ange- team, Paragon has a top-deck advi- same office space (have been doing les and with u b s. The duo launched sory board too, consisting some of the so since 2015), because they are now Paragon Partners Growth Fund, an leading members from Indian indus- co-founders of a -based pri- aif-Category ii private equity fund, try – such as Deepak Parekh, chair- vate equity investment firm – Para- in August 2015, to invest in mid-mar- man, h d f c , who is also Siddharth’s gon Partners. “We focus largely on ket private companies in India. “We father; Harsh Mariwala, chairman, five key sectors comprising consumer target an investment size of $10-15 Industries; Luis Miranda, for- discretionary, , million (R50-100 crore) as largely mer chairman, i d f c Private Equity; infrastructure services (capex light), minority growth capital in unlisted Arun Nanda, chairman, Mahin- industrials and healthcare services entities (15-50 per cent stake). We dra Holidays & Resorts India; Sunil and will look to invest in companies, have done four investments so far and Mehta, former head, aig India; and where we can play an active role as a have looked at scale and maturity and Jeff Serota, former senior partner, Ares shareholder,” explains Parekh, who not start-ups – companies that are Private Equity group. This board con- has over 14 years of work experience earning revenues of R100-500 crore stitutes an important ingredient that across the US, the UK and India, a and are profitable,” says Nindrajog, helps open doors for growth opportu- majority of which involved invest- whose Paragon Partners Growth Fund nities as well as deal sourcing. ing in emerging markets. Prior to i has already raised R500 crore, which Paragon did well in 2016, taking starting his own venture, Parekh had it raised from domestic and interna- its investment tally to R300 crore. worked in Actis, a private equity fund tional investors like Fairfax group, In its first year, Paragon’s maiden at its London and Mumbai offices,ifc s i d b i , Fund of Funds, investment was only R70 crore, made Washington and at the Boston Con- Infina Finance (an associate of Kotak to Capacit’e Infraprojects, Mum- sulting Group in New York. In India Mahindra Bank) and Edelweiss group bai (engaged in the construction of too, he has been an active participant to name a few. high-rise and super-high rise struc- on the angel network scene. Parekh and Nindrajog have been tures, as also factories, for real estate

u 60 u april 10-23, 2017 Business India u the magazine of the corporate world Private Equity developers, corporates and institu- tions across Mumbai, Hyderabad, Investment portfolio Bengaluru and the n c r). The second deal was an investment apacit’e Infraproj- and Volvo. Over time, it accessories. It also has of about $17 million for nearly 35 per Cects is promoted developed competen- the exclusive distribution cent stake in an over-four-decade- by Rahul Katyal, Rohit cies and qualifications in rights, through its Pro- old, Bengaluru-based, R400 crore (for Katyal and Subir Malho- the aerospace sector and line Fitness division, for 2016-17) maini Precision Products, tra, who collectively have also supplies aeroplane Johnson Healthtech (Tai- manufacturer and supplier of high- over 60 years’ experience parts to Snecma, g e and wan), one of the global precision engineering components in the Indian construction Marshall. mppl has differ- manufacturers of fitness and assemblies. “We find Paragon a industry. Within a short entiated itself by develop- equipment, to promote strong partner. It provides value-addi- span of three years since ing capabilities to make its brands such as Matrix, tion in terms of time spent on advi- inception, Capacit’e has increasingly complex Horizon and Vision (which sors, which means a lot to us. Paragon achieved scale with net parts and sub-assem- compete with brands like is helping to look at various strategic revenue of over H1,100 blies and has forayed into Cybex, TechnoGym, Life- growth opportunities and prospects, crore for 2016-17. next-generation com- Fitness and Precor). including potential acquisition over- Maini Precision Prod- ponents such as g d i (a InCred, a technology- seas and in India. It is also helping to ucts makes and supplies gasoline direct injection driven new age n b fc was build a good organisation structure for high-precision engineer- system) pump bodies, founded by Bhupinder exponential growth over the next 3-4 ing components and a m t (automatic transmis- Singh (formerly head, years. Paragon has a strong analytical assemblies. It caters to sion system) parts and , culture, which is now helping us to the global automotive, le ap (future generation Asia-Pacific, Deutsche take decisions to be more bottomline- industrial and aerospace of engine platform for Bank) and backed by focussed. It is open-minded enough sectors. Founded in 1973 single aisle aircraft) Anshu Jain (formerly to understand the promoters’ views by the Maini family, the engine components. co-ceo, Deutsche Bank). and then support what we agree on,” company commenced Cravatex Brands is a InCred focusses on four says Gautam Maini, m d, m ppl and a operations as a supplier of wholly-owned subsidiary lending verticals – afford- second generation member of the auto parts to Bosch and, of a listed entity – Cra- able housing, s m e s, Maini family. since then, has diversified vatex. This company has education and consumer to supply a number of an exclusive long-term finance. Investment flow other leading automotive licensing agreement with The company has In the last week of March 2017, the o e ms and Tier I compo- fil a, an Italian sports- already raised over R550 fund completed two fresh investment nent suppliers including wear and lifestyle brand, crore from investors from transactions aggregating to R100 crore Eaton, Magneti Marelli for footwear, apparel and India and overseas. u (about $15 million) worth of invest- ments in Cravatex Brands (subsidiary of Cravatex, a pan-India retail and dis- c m d, Cravatex. “With the support to us”. tribution platform for lifestyle, sports of an actively involved investor of “We are thrilled to support InCred and wellness) and . such a high pedigree and our oper- in its goal to be a world class lending Of this, R75 crore was pumped into ational knowledge of the market, we platform,” observes Parekh. “InCred Cravatex itself and the balance into feel confident of our future success”. has put together a strong management InCred, a technology-driven new age Batra is a second generation entre- team with deep domain expertise; non-banking finance company. preneur, active in the sportswear it also has a well-defined execution “Cravatex Brands is entering market in India, which is R6,000- plan. We believe the company is ide- an exciting phase of growth,” rea- crore strong and growing at 13 per ally positioned to benefit from a sig- sons Nindrajog. “The opportunity cent annually. nificant lending opportunity, given to partner with global brands in the “InCred’s key objective is to further the current levels of credit penetra- fast-growing sportswear and well- the cause of financial inclusion for tion in India”. ness industries, driven by the strong India’s underserved millions, using Paragon’s strategy is to hand- Indian consumption story, makes for technology to enable innovative risk hold the investee companies. “We a great investment thesis. We believe management processes, along with a are active investors,” affirms Parekh, we can significantly grow the fila simple and straightforward customer looking at raising a corpus of about brand together, while also reinforcing experience,” explains Bhupinder R1,000 crore in the next 3-4 months, the company’s leadership in the well- Singh, c e o, InCred. “With Paragon, with an active pipeline of new deals ness industry”. we hope to benefit from the special- in place. “We will stay and grow with “Our association with Paragon ised domain knowledge of Nindrajog the companies for a period of 4-8 Partners is an important milestone and Parekh, across various industries, years, before we exit”. as we embark on our next jour- including finance and technology, u LANCELOT JOSEPH ney of growth,” says Rajesh Batra, which will be of considerable benefit [email protected]

u 61 u april 10-23, 2017