A mid-market, sector focused
independent private equity firm

 
 
 

While one interpretation of the Sanskrit word “Arth” is “Capital, wealth, prosperity”, the other is “meaning“ or “meaningful”. We truly believe that generating superior returns for our investors is in line with the responsibility that we and our portfolio companies have towards our larger set of stakeholders.

Arth Capital believes in investing in a way that creates positive ripples throughout the related society. We believe that a responsible approach makes our financial returns far more sustainable over the longer term. Further, adhering to Environmental, Social and Governance (ESG) norms proactively makes our portfolio companies less vulnerable and gives that much more confidence to our investors to partner with us.

Enumerated below are examples of Arth’s General Partners’ personal initiatives as well as initiatives led by companies where they held board positions in the past. In some cases the general partners continue on the boards as independent directors to this date.

  • Sector orientation addresses pressing needs - Engineering orientation led to VA Tech investment that provides clean water for millions of people and treatment of industrial effluents
  • While at Tebma, sponsored a jetty and dredging for local fishermen
  • Focus on solid demand led sectors such as Healthcare, Food (Consumer) – promises to support companies that fulfil the essential societal needs
  • Most investments going forward likely to have operating assets and majority of workforce outside the large cities - thus helping develop smaller towns
 
  • In their personal capacity, the General Partners have supported initiatives such as setting up a child care and skill training centre in Pidurugulla (AP) for the children of mine workers
 
 
  • Special Situations investing enables targets to get a new lease of life, which enables keeping the real assets in production and protect employment.
  • Growth investing lead to generation of new assets and increase in employment. E.g., VA Tech had 200 people in 2005; currently at 2,000. PVR had 350 employees in 2003, now has 3800
  • Control based, longer term investments in companies makes it a necessity to align the larger workforce and not just top management. This learning has been ingrained as a result of positive experiences in the
    following cases –
 
  • By the time of VA Tech exit, 1,000 employees held VA Tech ESOP through investor driven incentive plan
  • At Ace Refractories, created a broad based ESOP pool and increased wages of all employees to bring them in line with market
 
  • Ensure adherence to covenants regarding environmental norms at the investee companies and specifically improve the practices in the investee company
  • The team has experience in industries such as cement, metals etc. where the increasingly strict environment norms may pose a risk to shareholders. We are well aware of the relevant norms, and ensure that we partner with the management to bring environment compliance issues to the forefront for the board and management.
 
  • Promote significantly higher standards of corporate governance at portfolio companies. In companies where General Partners’ have been on the board in the past, they have -
  • Brought in reputed industry people as independent board members at past investee companies
  • Introduced various processes and automated systems such as IFRS implementation ERP systems for better corporate management
  • Improved audit control through internal processes and reputed external audit firm