India focused SPAC backed by Elevation Capital-Think Investments files for IPO

Think Elevation Capital Growth Opportunities, a blank check company backed by Think Investments and Elevation Capital (formerly SAIF Partners), filed for a $225 million initial public offering or IPO with the US SEC on Friday. 

A joint venture between Think Investments and Elevation Capital, this special purpose acquisition company or SPAC will focus exclusively on Indian tech companies. 

A SPAC is a blank check company designed to take companies public without going through the traditional IPO process and has become a popular route to fund tech startups with public money instead of getting funds from LPs. 

“We currently do not have any specific business combination under consideration. Our management team is continuously made aware of potential business opportunities, one or more of which we may desire to pursue a business combination. However, we have not selected any specific business combination target,” the company said in its filing.

The SPAC plans to raise $225 million by offering 22.5 million units at $10 with an option to extend the allotment to $258.75 million (25.875 million units) if the underwriter’s over-allotment option is exercised in full. Each unit will consist of one share of common stock and a quarter of a warrant exercisable at $11.50. 

Market analyst Renaissance Capital estimates that the IPO will be valued at around $281 million. Concurrent to this public offer, Think Capital LLC, one of the sponsors, has agreed to purchase 5 million warrants (extendable to 5.45 million warrants) in a private placement. 

Each of these warrants has been priced at $1.5 and will be exercisable to purchase 1 Class A ordinary share at $11.50 per share. Think Capital has also extended a loan of $300K to the SPAC which will be utilised for covering the listing related expenses.

After the proposed offering, the promoters (sponsors/initial shareholders) will own 20% of the company’s outstanding shares on an ‘as-converted basis’. They have agreed to not transfer or sell shares held by them within one year after the completion of the acquisition. 

Think Elevation Capital Growth Opportunities is led by its co-CEOs and Directors Ravi Adusumalli and Shashin Shah. Adusumalli had founded Elevation Capital in 2002 and has backed companies like Paytm, Swiggy and BookMyShow, among others, while Shah had founded Think Investments in 2013.

“Our primary focus will be on the Indian technology ecosystem. The Indian technology sector is a large and growing market that we believe will provide attractive target opportunities for us,” Think Elevation Capital Growth Opportunities said in its filing. 

It will also seek initial business combination targets that are a play on India’s engineering talent, the company said. Among its core guiding principles would be to back companies that seem IPO ready. 

The board of this SPAC includes some of the most prominent names in the Indian tech ecosystem including Paytm’s Vijay Shekhar Sharma, Dream11’s Harsh Jain and Kabir Misra, former SoftBank executive and current managing partner of RPS Ventures. 

Think Elevation Capital Growth Opportunities plans to list on the Nasdaq under the symbol TEGAU. Morgan Stanley is the sole bookrunner on the deal.

According to the details available in the SEC filing, Think Investments’s track record in India includes approximately $1 billion of investments in Indian companies as of February 28, 2021, including early-stage investments in Dream11, PharmEasy and Chaayos; growth capital investments in the National Stock Exchange of India and Experian; and public investments in Bajaj Finance, Laurus Labs and Radico Khaitan. 

Think Investments and Elevation Capital-backed companies were valued at approximately $7.4 billion combined and generated an aggregate 5.7x multiple on invested capital, and had approximately $960 million in assets under management in public companies as of December 31, 2020.