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IDFC Securities MD quits to float venture capital firm

January 7, 2014

MUMBAI: IDFC Securities’s managing director and star equity analyst Nikhil Vora has quit to float a venture capital firm focused on investments in the consumer sector, according to people directly aware of the matter. Vora is leaving IDFC after a decade-long stint where he was also the head of research.

This move is one of the first crossovers from broking to money management and reminiscent of Wall Street traders and research heads leaving million-dollar jobs to board the hedge fund and private equity business. Vora is best known for his analytical work on India’s consumer sector and evolving a strategic road map for FMCG giants like Nestle India, Hindustan Unilever, Marico and Godrej.

“I am leaving to start a consumer-centric venture capital fund, which will have a very strong operating team including a CEO of a large domestic consumer company,” Vora told TOI. “We will look at a broader consumption story, which is non-infra and non-financial services,” he said. Vora, who started his career with ASK Raymond James, declined to offer details of his new venture.

The fund will make early-stage growth investments with a corpus of Rs 250-300 crore and is backed by a group of large domestic investors, including promoters of a large broking firm, Khandelwals of Systematix Group. Vora may be joined by a few more people from IDFC’s investment advisory business, but details could not be ascertained at the time of going to press.

Vora’s fund will be one of the rare home-grown early-stage investors focused on the domestic consumer space despite a need for more venture capitalists in an increasingly entrepreneurial economy. Both venture capital and private equity, who are long-term providers of risk capital, have emerged as a key source of funds for domestic small- and mid-cap companies in Asia’s third largest economy. Venture capital deals accounted for 11% of India’s $7.5-billion private equity investments last calendar. They accounted for more than half of 380 PE deals struck in 2013.