8/7/2019 sachin - Zephyr ET

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THE ECONOMIC TIMES MONDAY APRIL 11 20114

We identify teams that are progressive and are looking to brina more professional and structured way of doing business

Zephyr Peacock, the India-focused private equity fund of

US-based Zephyr Management, is hopeful about IndiasSME growth story and is firming up plans to raise a part of its third fund to be invested in potential growth-oriented

firms in India. Tapash Talukdar speaks with Sachin Ma-heshwari, director of Zephyr Peacock about the funds plans

for this year and ahead. Excerpts:

Zephyr Peacock has been chasing Indias vastSME opportunities. What will be your invest-ment strategy going forward?Our strategy has been and will be to invest in variousSME firms across sectors with a fund value of up to` 75 crore for promising firms. We look for invest-ments where the promoters/management teamsconsider us as partners who can help the company

beyond just providing capital. We identify teams thatare progressive and are looking to bring in a more

professional and structured way of doing business.

What is the typical size of your investment perdeal?Our investment size ranges from ` 25 crores to ` 75crores. We take minority stakes in the companies thatwe invest in.

How many firms are you likely to partner withduring this year and which sectors are attracting

you the most?We will invest in 3-4 companies during the course ofthis year. Our mandate is to invest across sectors,however, we are attracted to sec-tors that are fast growing andhave niches where we can findcompanies that are market lead-ers in those segments. Some ofthe sectors that we are currentlyfocusing on are financial services,agriculture, logistics and infra-structure ancillaries.

Tell us something about youroverall portfolio and the re-cent deals that you have madein varied sectors?Our current investments have

been in education, IT infrastruc-ture, pharmaceuticals, telecom,automotives, plastic packagingand financial software. The mostrecent investments were in Tri-max and Aizant.

Trimax is the leading provider of Data Center serv-ices, IT infrastructure management services and end-to-end IT solutions to domestic client s in India. It haspresence in 100 different locations in India and hasan on-site reach within 4 hours to 1000 different lo-

cations. With this kind of reach, it is able to serve bothlarge enterprises which have a pan India presenceand also SMEs that are present in these Tier II andTier III cities.

Aizant is our most recent investment in the phar-

maceutical CRO space and is based out of Hyderabad.It is a market leader in providing outsourced ser vicesin formulation development to the top 10 leadingpharmaceutical companies in the world. It has astrong emphasis on scientific collaboration which al-lows them to provide differentiated and high valueadded services to their clients.

Are SME firms overvalued at this point in time?How do you assess the valuations prevailing inthe market?In all of our investments we have been able to get theright valuations given our approach of being partners

to the company and helpinggrow the company with as muchassistance as needed by the com-pany. Valuations are driven bycomparables such as public mar-kets and other recent transactionvalues. The valuations were de-flated in the last couple of yearsdue to the stock markets tradingat very low valuations. We haveseen a correction on that end inthe recent months.

On the strategy side, what arethe inputs that you offer tochange the course of the SMEfirms? What are your exitstrategies?Most of the companies that wework with are at a stage wherethe promoter has brought the

company to a certain revenue level and is looking toscale it beyond those levels. This requires manage-ment development, a structured approach to capitaland operational efficiency and business development

beyond his/her networ k of contacts. We bring in our

experience and resources on all of these fr onts to helpthe SMEs grow faster.We have an investment horizon of 3-5 years and

look to exit through various options. Our favouredoptions are an IPO or a strategic sale.

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Most of the compa-nies we work withare at a stage wherethe promoter has

brought the company to a

certain revenue level and islooking to scale.Thisrequires managementdevelopment, a structuredapproach to capital andoperational efficiency andbusiness developmentbeyond his/her network

SACHIN MAHESHWARIDIRECTORZEPHYR PEACOCK