0.1 overview

Overview

Kotak Special Situations Fund makes strategic investments in companies with a sector agnostic approach. The Fund makes investments with the objective of obtaining primarily long-term capital appreciation and returns in the nature of interest, dividend, capital gains or share of profits through a combination of appropriate instruments on its investments.

We invest across sectors to tap into the special situations and stressed assets opportunity in India. We have expertise in a wide range of sectors including real estate, healthcare, infrastructure, power, consumer, industrials, information technology and financial services etc. All these sectors will benefit from rising income levels, increased consumption and favorable demographics in India. Such fundamental drivers coupled with attractive entry valuations in the distressed investments are expected to offer attractive returns to investors.

Investment Strategy

The Fund’s investment objective is to generate target returns by primarily investing in distressed/stressed or special situation opportunities in India. Investments typically involve a combination of debt, equity and mezzanine instruments. Our investment strategies focus on the following:

Special Situations: In certain special situation opportunities which may arise due to lack of liquidity or otherwise regulatory restrictions for banks and non-banking financial companies. These will include situations like investor take-out financing, group restructuring and promoter financing.

Asset Acquisitions: In limited ongoing business operations but with valuable assets which can be sold to generate returns. In such cases we look at pure asset plays, where we invest in entities with assets such as real estate, hotels or other commercial assets. Returns are generated predominantly by sale of underlying assets to one or multiple parties over a period of time.

Stressed Assets: With positive and stable business outlook and competent management. However, such businesses could be under financial stress for various external / transient reasons. In such cases, we partner with existing promoters by offering required financial support.

IBC Opportunities: With positive and stable business outlook and where a change or augmentation of management is necessary to improve performance for regulatory reasons. In such cases, we partner with strategic or operating partner to acquire and restructure the business.

Kotak Special Situations Fund differentiates itself in the following ways:

The Fund is focused on opportunities in special situations like investor take-out financing, group restructuring and promoter financing, credit and distressed assets under Insolvency and Bankruptcy Code (IBC), pre-IBC opportunities, and assets under liquidation.

The Fund has a broad mandate to invest across asset types and sectors with a flexible approach to investing and structuring.

The Group and team has a deep understanding of various sectors and experience of working with Indian promoters over last 30+ years.

Our Team

0.3 our team

Eshwar Karra

CEO – Special Situations Fund

Eshwar joined the Kotak Mahindra Group in 2000 and brings with him over two decades of financial services experience.

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Rahul Chhaparwal

Executive Director

Rahul has been with Kotak Special Situation Fund since inception and plays a pivotal role across all the facets of its operations...

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Rahul Shah

Executive Director

Rahul Shah has joined Kotak Special Situations Fund in January 2019 after spending more than 7 years with Kotak Private Equity Group.

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Piyush Thakkar

Director

Piyush Thakkar joined Kotak Special Situations Fund in October 2020 and brings with him more than 15 years of experience across wealth management, etc.

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Shishir Srivastava

Vice President

Shishir Srivastava joined Kotak Special Situations Fund in February 2021 and brings with him 11 years...

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Pratik Parekh

Vice President

Pratik Parekh joined Kotak’s Special Situations Fund in January 2019 and brings with him almost 12 years of experience...

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Ankit Deora

Vice-President

Ankit Deora joined Kotak Special Situations Fund (“KSSF”) in July 2021 and is heading the Asset Management Function at KSSF.

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Rohan Kilachand

Associate Vice-President

Rohan joined Kotak Special Situations Fund in April 2019 and brings with him 9 years of experience...

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Agrata Gupta

Associate

Agrata joined Kotak Special Situations Fund in December 2018.

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Sanket Haleangadi

Associate

Sanket joined Kotak Special Situations Fund in August 2021.

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Himanshu Punjabi

Associate

Himanshu joined Kotak Special Situations Fund in September 2021.

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0.4 Select Portfolio

HKR Roadways

HKR Roadways Limited (HKR) is special purpose vehicle (SPV) that was awarded a 25 year concession by the Andhra Pradesh Road Development Corporation (now Telangana Government) to develop and operate a 207 kilometre road.

HKR is a 207 km four-lane toll highway project, covering the existing Hyderabad Karimnagar Ramagundan section of State Highway One (SH1). The Project was awarded under Design, Build, Finance, Operate and Transfer basis.

KSSF has invested INR 715 Cr in a combination of debt and equity of HKR. The investment helped HKR complete a one-time settlement with existing lenders and resolve its debt issues. The resolution helped HKR to focus on achieving COD (currently at PCOD status), and unlocked funds for operational improvement.

Prius Commercial Projects

Prius Commercial Projects Private Limited (Prius) is engaged in leasing out commercial space and predominantly owns the building named "Prius Platinum" at a premium location in Saket, Delhi, with a leasable area of 258,957 sq.ft..

Prius was undergoing the Corporate Insolvency Resolution under the Insolvency and Bankruptcy Code. A KSSF led consortium emerged as the successful resolution applicant, with the Honorable NCLT, Delhi duly approving its resolution plan.

The investment provides KSSF with a platform to build a portfolio of real estate office assets along the lines of Prius, leveraging on the group's extensive expertise in real estate as well as the resolution of stressed assets. The investment allows the refurbishment and leasing of Prius’ office space, where KSSF will support a professional management team.

DCW

DCW Limited (DCW) is a leading Chlor-Alkali based chemicals producer with increasing focus on specialty chemicals. It was established in 1925 as India’s first soda ash factory at Dhrangadhra in Gujarat. In 1959, it commissioned its chlor-alkali plant at Sahupuram in Tamil Nadu. DCW manufactures products like PVC, C-PVC (chlorinated polyvinyl chloride), caustic soda, soda ash and SIOP (synthetic iron oxide pigment). It is a market leader in specialty chemicals like C-PVC and SIOP.

DCW is scaling up capacity for its products with major capital expenditure done over the last few years in the specialty chemical segment and de-bottlenecking of commodity chemical business. It plans to focus on niche specialty chemical business to ramp-up its profit margin profile.

KSSF has invested Rs. 410 crore in the form of non-convertible debentures (NCDs) and optionally convertible debentures (OCDs) in the company. KSSF funding has helped DCW refinance its existing term loans, improve its working capital, enhance its capacity utilization to meet with the growing demand for its products and scale up the specialty chemicals operations.

AGS

AGS Transact Technologies Limited (AGSTTL) is a leading ATM managed services and Cash management services provider in India. It also provides banking automation solutions and is the largest integrated omni-channel payment solutions provider in India, providing digital and cash-based solutions to banks and corporate clients.

AGSTTL is one of the largest provider of end-to-end cash and digital payment solutions and automation technology in India with over 30,000 ATMs under management. It also provides cash management services (CMS) to over 47,000 ATMs through its subsidiary Securevalue which is the second largest CMS player in the country.

KSSF has invested Rs 350 crore in the form of non-convertible debentures (NCDs). KSSF investment in AGSTTL has significantly improved the financial risk profile of the group and help the company implement the next phase of growth.

Pandora Projects

Pandora Projects Private Limited (Pandora) is a Joint Venture between Prestige Estate Projects Limited and DB Realty Limited for development of a Grade A commercial development located opposite Mahalaxmi Race Course, Worli, Mumbai.

The project will be on a land parcel admeasuring 5.59 acres and has development potential of over 2.5 Mn Sq ft of leasable area. It is located in one of the prime market of Central Mumbai and is ideal for such development with splendid view of Race Course. Residential project proposed thereon was delayed due to various issues faced and multiple third party claims created over the years.

KSSF has invested 525 Crs as debt and the investment will help the Joint Venture Partners to meet project development cost and various pre approval cost for their upcoming commercial development.

OmniActive Health Technologies

Established in 2005, OmniActive Health Technologies (“OmniActive”) seeks to improve lives by enhancing nutrition and wellness through science and innovation. OmniActive’s extensive portfolio consists of natural, scientifically-validated, sustainable and IP-protected ingredients for global customers in dietary supplements and functional foods and beverages.

Some of the Company’s leading brands include Lutemax, Capsimax, CurcuWIN, Gingever, Xtenergy and OmniXan. OmniActive partners with customers through its sales and distribution networks in key markets worldwide, supported by three global R&D centers and best-in-class production facilities throughout India. The Company has offices in Mumbai, India and Morristown, New Jersey.

KSSF has invested Rs. 250 crore to help promoter buy-out the B2C supplements business from OmniActive, provide dry-powder for further investment in the B2C business and provide the ability to support any future acquisitions by OmniActive. The Company has built a strong reputation and deep customer relationships and with help of KSSF investment the OmniActive team will further be able to accelerate the growth in this business.

Jindal Stainless Limited

Jindal Stainless Limited (JSL) is one of the largest stainless steel producer in India. JSL along with its sister company, Jindal Stainless Hisar Limited (JSHL) ranks amongst the top 10 stainless steel conglomerates in the world.

JSL has an integrated stainless steel manufacturing capacity located in the eastern part of India in the state of Odisha. Its current installed stainless steel manufacturing capacity is 1.1 million tons per annum, this can eventually be scaled up to 3.2 million tonnes per annum. The manufacturing complex is also equipped with a captive ferro alloy capacity.

KSSF invested Rs.500 crore in the debt and equity of JSL. This helped JSL come out of corporate debt restructuring (CDR) process and also ensured promoters equity in the company was not diluted. The CDR exit has provided financial and operational flexibility to the business. JSL can now chart out its growth and debottlenecking plans by approaching the financial markets on competitive terms.

Nuvoco Vistas Corporation

Nuvoco Vistas Corporation Limited (Nuvoco) is a leading cement manufacturer with a focus on East, West and North India. KSSF invested Rs.500 crore into convertible equity of Nuvoco to help it finance the acquisition of Emami Cement Ltd. (ECL), the cement business of the Emami Group based in Eastern India.

ECL acquisition will bring Nuvoco’s total cement capacity to more than 20 mtpa, including an ongoing capacity expansion project at its Jojobera plant. The combined operations will span three facilities in Chhattisgarh, two each in Rajasthan and West Bengal and one each in Bihar, Jharkhand, Odisha and Haryana. The acquisition consolidates Nuvoco’s position as a leading cement manufacturer in Eastern India.

Nuvoco’s product portfolio includes cement (high-performing, premium and blended varieties), ready-mix concrete (RMX) and modern building materials comprising of construction chemicals, multipurpose bonding agents as well as waterproofing agents.