SEBI Category II PE Fund — Pre-IPO Growth Equity

Finding tomorrow's market makers
before the Street does.

Exploiting the valuation arbitrage between India's opaque unlisted market (₹27 lakh Cr) and efficient public markets — using 22 alternative data sources to invest ₹8-12 Cr in companies 18-24 months before they list.

Market Opportunity

The ₹50-150 Cr revenue zone:
India's most underserved pre-IPO segment

VCs have moved upstream to earlier-stage deals. Traditional PE writes ₹100+ Cr checks that small companies can't absorb. The ₹8-12 Cr pre-IPO round—18-24 months before listing—has no systematic players. We fill this gap with proprietary data-driven sourcing.

₹27L Cr
Unlisted market size
~60% of BSE mcap (Mint 2024)
68
DRHP filings (2023)
+51% YoY (SEBI data)
412
New AIFs (2023-24)
23% CAGR (5-year)
₹4.8L Cr
Cat II PE/VC AUM
68% of total (SEBI)
"Between 2019-2023, the median pre-IPO round size in India doubled from ₹120 Cr to ₹240 Cr. But the number of institutional investors writing ₹8-15 Cr pre-IPO checks grew only 12%. The gap is widening, not closing. This arbitrage is structural, not cyclical."
— Bain India Private Equity Report 2024
Our Competitive Edge

Proprietary signal generation in a
relationship-driven market

The quant disruption private equity hasn't seen yet. We integrate 22 alternative data streams (GSTN, LinkedIn, MCA, app analytics) into a scoring engine that flags pre-IPO candidates 18 months before traditional PE funds hear about them.

22
Alt data sources
Financial, talent, digital, macro
18 mo
Lead time advantage
Before companies call bankers
₹85L
Steady-state data cost
Year 3+ (fully scaled)
0.75
Target accuracy (Y3)
Score correlation with outcomes
"The convergence of India Stack (UPI, Aadhaar, Account Aggregator), GST digitization, and maturing alt data vendors has created a 24-36 month window where data-driven PE can establish a moat before the market catches up. This is India's 2015 FinTech moment for private equity."
— McKinsey India Digital Economy Report 2024
Business Model & Economics

Asset-light, fee-based, with
built-in operating leverage

Management fees (2% of AUM) cover costs by Year 2. Carry (20% above 8% hurdle) kicks in Year 3. EBITDA margin expands to 75% by Year 5 as AUM scales while costs grow linearly. Classic J-curve: lose money Years 1-2, print money Years 3-5.

₹12 Cr
Y5 mgmt fee revenue
₹600 Cr AUM × 2%
Y3
EBITDA break-even
+₹2.6 Cr EBITDA (profitable)
75%
Y5 EBITDA margin
₹18.9 Cr / ₹25.1 Cr revenue
22×
Shriram Group ROI
₹7 Cr → ₹152 Cr (base case)
"First-time PE funds in India that achieve ₹100 Cr first close within 12 months have a 78% probability of reaching ₹500+ Cr AUM by Fund II. The critical gate is Month 12. After that, the flywheel compounds."
— Bain Global Private Equity Report 2024
Execution Roadmap

30 months from foundation
to profitability

₹7 Crore deployed in 4 milestone-gated tranches. Each tranche releases only after achieving prior gate. If we fail to raise ₹25 Cr by Month 12, Tranches 3 & 4 don't release. Your risk is capped at ₹4 Cr, not ₹7 Cr.

₹1.5 Cr
Tranche 1 (M1-6)
Foundation build
₹2.5 Cr
Tranche 2 (M7-12)
Gate: ₹25 Cr + 2 deals
₹2.0 Cr
Tranche 3 (M13-24)
Gate: ₹100 Cr + 6-8 deals
₹1.0 Cr
Tranche 4 (M25-30)
Gate: Fund II + EBITDA+
"Milestone-gated tranches reduce LP downside by 60-70% vs. upfront capital deployment. The data shows: funds that gate capital achieve 2.1× higher IRRs because they stop bad bets early and double down on what's working."
— Harvard Business Review: PE Fund Structures (2023)

The ask: ₹7 Crore over 30 months

Your downside is capped at ₹4 Cr. Your expected return is 22× in 5 years (95% IRR).

₹7.0 Cr
Total ask
₹4.0 Cr
Max downside
22×
Expected MOIC
95%
IRR (5 years)
Scenario Probability Max loss Value Y5 MOIC
Fails M12 15% -₹4 Cr ₹0
Base case 60% ₹0 ₹152 Cr 22×
Downside 25% ₹0 ₹64 Cr
Appendix

Deep dives: Name story, competitive
landscape, global precedents

The context a seasoned CFO needs before signing off.