The investment will be from the capital managed by Modulus Alternatives including its second fund – India Credit Opportunities Fund II, which Modulus Alternatives launched earlier this year with a target corpus of Rs 1,250 crore. The fund has so far received capital commitments of more than Rs 200 crore, sources said.
Modulus Alternatives and Shivam Autotech did not respond to requests for comment.
The new fund will follow a similar investment strategy as Modulus’ first fund and will invest in mid-sized companies in the performing credit space through a diverse range of instruments and strategies.
As per a presentation to investors, the new fund is a category II AIF and will follow a sectoral investment pattern with preference towards consumption, healthcare, core economy, manufacturing and industrial companies. Founded in 2018, Modulus Alternatives is one of the early movers in the private credit space. The firm launched its first fund in early 2019 and is tracking a mid teen returns since inception.The fund has made nine exits so far and returned more than INR 850 crore to investors validating well-researched sectoral calls of the investment team.Shivam Autotech is a manufacturer of transmission gears and steering components for two-wheelers and four-wheelers. The company caters to all the leading auto manufacturers in both domestic and global markets.
The proceeds of the investment will be utilised for both growth and working capital.
It is promoted by Yogesh Munjal and Neeraj Munjal, who also hold a significant stake in Munjal Showa Limited.
The company’s stock closed at marginally higher on the BSE on Thursday at Rs 30.25. It has gained over 5% since the beginning of the year.
Since the Covid-19 pandemic shock, the automotive sector has staged a smart recovery on the back of a boom in demand for personal mobility. The auto component industry recorded its highest-ever ever turnover in FY23 at Rs 5.60 lakh crore, registering a growth of 32.8% over the previous year, according to the Automotive Component Manufacturers Association of India (ACMA).
The growth has attracted a flurry of private equity investments in the sector in the recent past. Kotak SSF invested in Viney Corporation in June 2023, Warburg Pincus picked up a stake in Imperial Auto in March 2022, TI Clean Mobility Private Limited raised investments from Multiples PE in March 2023.