Samara Capital Completes Second Fund with SMS Sale
Samara Capital has successfully closed its second fund, marking a significant milestone with the sale of SMS Integrated Facility Services to SILA Solutions for an impressive ₹275 crore. This transaction not only underscores the financial acumen of Samara but also highlights its ability to generate robust returns, achieving a 25% internal rate of return since the fund's inception in 2014. With more than ₹7,500 crore returned to investors, the firm is well-positioned as it gears up for closing its third fund.
The strategic decision to sell SMS reflects the growing interest in India’s facilities management sector. As companies adapt to new operational demands, the value of such services has become increasingly evident. Samara's move to attract domestic capital is noteworthy, as it seeks to diversify its investor base beyond its historical reliance on overseas funds. This shift indicates a changing landscape in Indian private equity, where domestic investors are now more open to high-quality funds.
Anchit Gupta, managing director at Samara, emphasized the importance of timely capital returns to investors. He stated, “We could have waited longer to extract significantly higher value, but it is equally important to return capital to our investors in a timely manner while still optimizing value.” This strategic outlook is pivotal as the firm prepares for its next phase of growth.
Samara’s second fund, initiated in 2014 with a corpus of ₹3,000 crore, made ten investments, all yielding positive returns. The firm’s disciplined investment approach was evident, especially during the pandemic, when it faced a substantial decline in revenues of nearly 30%. The challenges posed by COVID-19 necessitated a shift in focus towards resilience and recovery strategies.
Under the leadership of CEO Tarun Ramrakhiani, SMS has repositioned itself as a technology-enabled platform, expanding its service offerings to include safety and sustainability solutions. The acquisition of Awfis Care has further propelled revenue growth, positioning SMS competitively in a crowded market with players like Quest Corp and ISS Facility Services.
As Samara plans for the final close of its third fund by March or April, the firm remains optimistic. With a solid track record, strategic domestic partnerships, and a vision for the future, Samara Capital is poised for continued success in the evolving landscape of Indian private equity.
