ICICI Venture seeks at least $500M

ICICI Venture, an investment arm of No. 2 Indian lender ICICI Bank, is looking to raise between $150 million and $200 million from overseas investors for its India-focused fund, which has an overall target of $500 million.

The Mumbai-based firm, which manages more than $2 billion in assets, is raising $500 million with an option to raise another $300 million for the fund. Vishakha Mulye, CEO of ICICI Venture, confirmed the company would begin road shows for international investors as early as this week, but declined to give details of the amount of funds it seeks to raise.

“We have already received commitments of $350 million from domestic investors, including institutions and wealthy investors,” she told Reuters. “Now, we are commencing the launch to international investors.”

ICICI Venture focuses on domestic investments in the health care, education and infrastructure sectors, said Mulye, who has been with ICICI for 17 years.

Total private equity investment in India fell more than 60% to $4.4 billion in 2009 from $11.9 billion in 2008, according to VCC Edge, which tracks M&A and private equity and venture capital deals.

But Mulye sees the tide changing.

“The India story is looking better than ever before. Valuations now have become realistic and stable. We think it’s the best time to go for investments,” she said.

ICICI Venture is also planning to exit some of its earlier investments as market conditions have become more stable. “We are definitely in the divestment mode from our earlier investments. A few could be through IPOs and others through private placements,” Mulye said.

ICICI is not the only area investor looking at 2010 as a good time to exit. Kotak Mahindra Bank, IDFC and ILFS Investment Managers are also planning to exit some of their portfolio companies, encouraged by an 81% stock market rally in 2009 after the market slumped by more than half the year before. —Indulal P.M. and Pratish Narayanan, Reuters