Samara Capital Wraps Up Second Fund with Strategic SMS Facility Sale
Mumbai-based private equity firm Samara Capital has successfully concluded its second fund through the sale of portfolio company SMS Integrated Facility Services to larger competitor SILA Solutions Pvt Ltd, which is backed by Norwest Venture Partners. This transaction values SMS at an enterprise value of approximately ₹275 crore, marking the final exit from Samara's 2014-vintage fund.
Impressive Returns and Fund Performance
The exit delivered a gross internal rate of return (IRR) of about 25% and returned more than ₹7,500 crore to investors. Samara's second fund, raised in 2014 with a corpus of ₹3,000 crore including co-investments from limited partners, made ten investments, all of which generated positive returns. Anchit Gupta, managing director at Samara Capital, emphasized the firm's disciplined approach, stating, "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." He added that the EBITDA multiple achieved aligns with or marginally exceeds listed peers and comparable business-to-business companies.
Timing and Fundraising Push for Third Fund
The timing of this exit is crucial as Samara works towards closing its third fund within the next two months. Historically reliant on overseas investors, the firm is now attracting significant interest from domestic entities. Gupta noted, "Around three years ago, the window for domestic investors in private equity opened up meaningfully for high-quality funds. We saw this as a strategic opportunity." These domestic investors, often large family offices with operating businesses, provide a powerful flywheel for deal flow, ideation, and diligence. While the global fund has completed its final close, the domestic sleeve of Fund III is expected to close by March or April, with active investments already underway from both capital pools.
Notable Exits and Investment Strategy
Samara's second fund has seen several prominent exits, including:
- Sale of Spoton Logistics to Delhivery
- Stake sale in AIG Hospital to Quadria Capital
- Sale of Lotus Surgicals to Tube Investments and Premji Invest
- Stake sale in Oaknet Healthcare to Eris Lifesciences
Additionally, the firm offloaded stakes in Sahajanand Medical Technologies, First Meridian Business Services, and Paradise Food Court through a $150 million continuation fund led by TR Capital in 2023. Samara's investment in the facilities management space in 2017 capitalized on the formalization of a fragmented industry, driven by rising office penetration, increased outsourcing, and digitization of labor laws.
Operational Turnaround Amid Challenges
Initially pursuing an aggressive consolidation strategy, Samara aimed to build one of India's largest facilities management platforms. However, the COVID-19 pandemic presented severe headwinds, with a nearly 30% decline in revenues as clients shifted to remote work. Gupta explained, "During COVID, our primary focus shifted to staying resilient. Navigating that period successfully laid the foundation for the recovery and exit we eventually achieved." As part of the turnaround, Samara appointed Tarun Ramrakhiani as CEO in 2021, repositioning SMS as an engineering-led, technology-enabled platform with new offerings in safety, sustainability, energy management, and facilities operations.
SMS Facility Services Growth and Acquisition
SMS now provides housekeeping, security, hospitality, and technical services, with revenue growth supported by its acquisition of Awfis Care. The company competes with players like Quest Corp, ISS Facility Services, and BVG India Ltd. Samara acquired over 90% of SMS in 2017, scaling the business to roughly 2.5 times its entry level, with EBITDA tripling. SMS is tracking about ₹700 crore in revenue for the current fiscal year, up from ₹522.5 crore and a profit of ₹10 crore in FY25.
Acquirer Profile: SILA Solutions
SILA Solutions, incorporated in 2009 by brothers Sahil Vora and Rushabh Vora, offers facilities management, project management, and general contracting services across corporate, industrial, residential, and hospitality segments. Operating in over 125 cities with more than 22,000 employees, SILA reported revenues of about ₹913.9 crore as of March 2025. The company has historically funded acquisitions through promoter capital and equity from Norwest Venture Partners, which holds a significant stake.
This strategic sale underscores Samara Capital's robust track record and sets the stage for its next fundraising chapter, blending global and domestic investor interest to drive future growth in India's private equity landscape.
