Gaja Alternative Asset Management, which operates under the Gaja Capital brand, made its market debut on Wednesday at a premium of about 16 per cent to its ₹160 issue price. The ₹550-crore IPO was subscribed 31.33 times. The company’s fresh issue of ₹450 crore is to be used mainly for sponsor commitments to existing and proposed funds and repayment of a bridge loan. In an interview with businessline, UK Sinha, Non-executive chairman of Gaja Alternative Asset Management and former SEBI chairman, speaks about the evolution of the AIF industry, exits for private-market investors and the implications of Gaja’s listing.
What does Gaja’s listing change for an alternative asset manager?
An alternative asset management company like Gaja, has basically three streams of business. One is the management fees that they get. Second is the return that they get on their invested companies above a certain hurdle, called carry. And third is a sponsor commitment.SEBI regulations mandate asset managers to invest minimum 2.5 per cent of the size of your fund, in order to have skin in the game.So, this listing gives enough firepower to Gaja and any company which gets listed in future that they can make a sponsor contribution, removing the growth constraint. Of course, you have to have the capacity and manpower to be able to float two to six funds at a time, but the capital part is taken care of.
