Norwest Venture, a Silicon-valley venture capital firm, had bought 8.38% stake, or 38.4 lakh shares, of Shriram City Union Finance at Rs 315 per share.

Commenting on the development, Niren Shah, Managing Director-India, Norwest Ventures, said in 3-5 years, the company is looking at over 25% internal rate of return (IRR). In that respect, he said, “Shriram City is an exceptional entity among non-banking financial companies.”

Here is a verbatim transcript of the exclusive interview with Niren Shah on CNBC-TV18. Also watch the accompanying video.

Q: You have invested in Shriram City. Could you tell us what is the trend? What are you now looking for that is different from what you were looking for at that point? What is your IRR expectation, perhaps just a spattering of sectors? What has really changed at the moment?

A: We have been investing throughout the downturn. So, I don’t think much has changed for us. We continue to look at long-term plays; in about three to five years, we are typically looking at over 25% IRRs. In that respect, Shriram City is an exceptional company in the NBFC space. It has done pretty well in terms of asset quality, growth and profitability.

So, we continue to look for those across sectors. Sectors we are looking at are obviously banking and finance. We are also looking at manufacturing, agriculture, education, technology and telecommunications. So, it is pretty much sector-agnostic, even things like infrastructure. But it needs to meet our criteria, which is stringent. We are pretty bullish in the long run about India. So, we are not too worried about the current ups and downs in the markets. We are trying to look three years out and say that where will certain macro things play out. This is an investment in line with that macro theme.