L Capital Asia, a private equity fund backed by luxury brand LVMH, confirmed that it is in exclusive talks to buy a stake in India's biggest jewellery retailer Gitanjali Group.
"The talks with Gitanjali Capital are at an advanced stage. We are doing the due diligence," Ravi Thakran, LMVH's group president, South Asia, South East Asia and Middle East.
L Capital Asia will invest about $100 million (about Rs 450 crore) in the Gitanjali Group.
"We are looking at their branded business," Thakran told Hindustan Times .
He, however, did not divulge the share of equity that the fund plans to pick up in Gitanjali.
Thakran said the fund was also in "advance stages of discussion" with an Indian fashion company.
"The investment will be about $40 million (about Rs 180 crore)," he said without divulging the name of the company as he was bound a non-disclosure agreement.
L Capital Asia, a $650 million fund launched last year to invest in the region's emerging economies.
Thakran said the fund still has about $560 million to invest by 2014, about 80% of which will be Indian and Chinese companies.
It has studied 108 consumer companies in China, India and south-east Asia as potential investment targets.
Thakran said the fund aimed for a five-time return from the investment, which it plans to hold for four to five years.
Thakran said while LVMH focuses on the high-end segment, L Capital Asia invests in both aspirational and luxury brands.
One sector that the fund is keen to invest in is beauty and wellness brands inspired by Ayurveda - traditional Indian system of medicine.
"In western markets, people are going natural and organic. There is great growth potential in this area," he said.