VentureX

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Category AIF Category I

Company VentureX

Fund Managers Mr. Rajesh Singla

VentureX

VentureX is dedicated to high-growth opportunities within the SME sector, recognizing unparalleled potential for earnings growth. The company's investment philosophy is firmly grounded in the timeless principle that share prices align with earnings and value creation potential. By combining this approach with a disciplined focus on downside valuation and strong fundamentals, VentureX strives to deliver sustainable and rewarding investment outcomes. VentureX is committed to supporting visionaries at the forefront of India's growth story. As the nation advances toward becoming one of the top three global economies, VentureX identifies resilient, innovative businesses that embody entrepreneurial excellence. Companies such as Waaree Renewable Technologies and Thejo Engineering, which have leveraged SME listings to achieve remarkable success, demonstrate the entrepreneurial drive and adaptability that align with VentureX's values. VentureX prioritizes businesses with a strong execution history, competitive moats, and clear growth trajectories, particularly those bolstered by sectoral tailwinds. Their disciplined approach ensures a balance between mitigating risks and maximizing long-term returns. With a deep appreciation for entrepreneurial stories, VentureX invests not only in numbers but also in the transformative narratives behind them.

Fund Snapshot

Parameters	Details
Name of the scheme	VentureX
Size of the fund	500 crores
Size of the green shoe	500 crores
Tenure of the fund	10+2
First closing of the fund	3 months from registration
Final closing of the fund	3 years from date of first close
Money call	10 lakhs/quarter (40 lakhs/yr, 1 cr in 2.5 yrs)
Investor commitment period or drawdown period	Up to 3 Years from the date of final close
Exit	Distribution Waterfall: When a company profit is booked from portfolio companies and needs to be distributed to all Limited Partners (LP) investors
Sponsor capital commitment	2.5% of the Corpus or 5 Cr. whichever is lower
Fund investment type	SME (Pre-IPO & Anchor Investment Placements in IPO, Secondary Investments)
Proposed investment by Sponsor/Investment	Close Ended, Long-Only Cat-I, Alternative Investment Funds

VentureX Investment Approach

What to Buy?

The strategy begins with building a strong thesis around a company using a proprietary LMVT framework. This helps identify businesses with solid fundamentals, scalable models, and clear long-term value creation potential.

When to Buy?

Timing is crucial, focusing on entering as early as possible, typically at the pre-IPO or IPO stage. This ensures positioning at the beginning of a company’s growth curve to maximize returns.

When to Exit?

A disciplined exit strategy is followed, driven by specific principles:

– Stepping away if growth expectations are unmet.

– Exiting when valuations become excessively high.

– Withdrawing in case of corporate governance issues.

VentureX Fund Overview

VentureX is Category 1 Fund, which focuses on identifying SME’s with strong competitive advantages, capable leadership, & a history of value creation all at a reasonable price.

Investment Framework

The Investment Framework focuses on identifying SMEs with strong competitive advantages, capable leadership, a proven history of value creation, and reasonable pricing. The framework is built around four key areas: Leadership, Moat, Valuation/Value Drivers, and Following Tailwinds.

Leadership

Leadership is emphasized through a track record of strong execution and a deep understanding of business operations, paired with an entrepreneurial spirit. High promoter holding is considered a positive indicator, reflecting the commitment of promoters to the business. Additionally, the leadership’s relevant experience and proven track record in management play a crucial role in ensuring sustained growth and effective decision-making.

Moat

The concept of a Moat is central to the framework, highlighting the importance of high pricing power and unique products that act as protective barriers against competitors. The strategy focuses on exploring large-scale opportunities with a “large pond, small fish” approach, allowing for significant growth potential. The ability to leverage economies of scale, licenses, and patents further strengthens the business model, making it robust and sustainable in the long term.

Valuation and Value Drivers

Valuation and Value Drivers are approached by targeting attractive valuation opportunities using metrics like PE, PEG, and EV/EBITDA. Ensuring a margin of safety in investments is a priority, along with maintaining a five-year average Debt-to-Equity (D/E) ratio of less than one, indicating financial stability. A consistent track record of shareholder wealth creation is also considered a key driver of value.

Following Tailwinds

Lastly, the framework emphasizes Following Tailwinds by focusing on high-growth sectors that benefit from supportive government policies. A commitment to innovation is evident in the focus on disruptive technologies, green energy, and artificial intelligence. Moreover, the ability to scale rapidly in evolving markets is seen as a significant advantage, enabling businesses to capitalize on emerging opportunities effectively.

In summary, this investment framework seeks to identify SMEs that possess a blend of strong leadership, competitive advantages, attractive valuations, and alignment with favorable market trends, all of which contribute to a sustainable and scalable growth strategy.

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