The Fund is sector agnostic, however the preferred sectors are Healthcare and allied Services, Food Processing, Alternative building materials, Education, Food Services, Hospitality, IT/ITES, Logistics Sector and Water and Clean Technologies. The Fund will be Shariah compliant and will not invest in stocks of the companies whose business activity is conventional financing, insurance companies, securities trading companies, entertainment including film production companies, cinema, cable TV, music etc., explosives, alcoholic beverages like wine and liquor, tobacco and its related products, pork and non- Halal food producing companies.
The Fund is looking for projects offering potential for an attractive growth and earnings. Some of the parameters critical for project selection are:
A strong and committed management team with a demonstrated track record and integrity.
High growth potential in the market, which the investee company seeks to serve the market will need to be quantifiably large with growth opportunities especially in emerging areas that address global markets.
The investee company should possess the ability to develop and retain a long term competitive advantage through the use of technology.
Return On Investment:
There should be a logical and visible exit mechanism available for investor that provides attractive capital appreciation with above-average profitability.
The Fund invests in the form of equity, Optionally Convertible Debentures (OCD)/ Optionally Convertible Cumulative Preferential Shares (OCCPS), etc. The exact instrument varies from case to case depending on the risk perception, the requirements of the investee company and the applicable SEBI regulations.
The Fund undertakes individual investment upwards of 10 million. Larger investment may also be considered jointly with national funds.
The Funds investment horizon varies from within 5 years with the option for a quicker exit incase the situation so warrants.
The preferred exit route is through a listing on the stock exchange within 5 years, or as may be stipulated, from the date of investment.
In case a public listing is not feasible due to the reasons of size of the investment or other circumstances, the alternative method of exit consists of a sale to strategic investor, buy-outs and buyback of share by the company and promoters on the basis of a pre-determined formula and independent valuation of shares as on the date of buyback.