India In Sight #06

Weekly updates on Indian private markets

Jul 10, 2023

We are Ambassador Capital Partners, an investment firm with a focus on private credit and private equity. Deeply embedded in the private markets ecosystem, ACP works with large global institutions to provide creative capital solutions for companies and asset managers.
In the spirit of making Indian private markets more accessible and transparent to global LPs and GPs, we have launched ‘India In Sight’ – consolidating and curating relevant information and insights from Indian private markets including trends, key deals, fundraises, KPIs and top tier research.
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KEY DEALS

Private Equity

Veritas Finance, an MSME focused NBFC, raised $145 million in a round led by Multiples, an India-based PE fund, and its co-investors, including IFC. Transaction involves both primary and secondary. (July 05, 2023)
GIC, Singapore’s SWF, and Genus Power, a smart meter manufacturer, will jointly invest $2 billion for smart metering projects in India. GIC will hold 74% stake and Genus Power will own the remaining 26%. (July 04, 2023)
NDR Warehousing, a warehouse development and operations platform, raised c.$60 million in a follow-on investment from Investcorp Group, a Bahrain-based asset manager. Investcorp had previously invested $55 million in NDR Warehousing in Feb 2022. (July 03, 2023)
Pharmeasy, an omnichannel pharmacy chain, is looking to raise c.$300 million from existing investors to retire the senior debt it had raised from Goldman Sachs. Manipal Group, a healthcare focused Indian conglomerate, might invest $125 million and the rest to be raised from existing investors. Expected valuation of $500-600 million (80-90% drop from its last valuation).

Credit

Vistaar Financial Services, an MSME focused NBFC, is in the process of securing $50 million in debt from the US International Development Finance Corporation (DFC). Vistaar is a Warburg Pincus portfolio company. (July 05, 2023)
DNEG Group, the UK-headquartered VFX arm of Prime Focus, secured a $75 million senior secured term loan from IFC. (July 04, 2023)
The Indian renewables arm of French energy major Engie is likely to secure a $200 million credit facility from AIIB and ADB to fund the construction of a 400-MW solar power project in Gujarat.

Other Credit Deals and Issuances

Power Finance Corporation, a state-owned energy finance company, provided $1.1 billion financing to HPCL Rajasthan Refinery, part of a state-owned oil refinery company. HPCL is setting up a greenfield refinery-cum-petrochemical complex at a project cost of over $9 billion; PFC is also planning to raise c.$760 million via c.7% bonds. (July 06, 2023)

KEY FUNDS AND FUNDRAISES

RV Capital, a Singapore-based hedge fund manager, floated its maiden India performing private credit fund to tap into the mid-market corporate financing market in the country. The new fund aims to raise c.$50 million targeting returns of 14-16% in INR. (July 06, 2023)
InvAscent, a life sciences PE fund, floated its fourth fund with a target of $400 million, that could push its AUM closer to $1 billion. (July 05, 2023)
JM Financial Group, a financial services firm, marked the first close of its maiden performing credit fund at $73 million, against a total target of c.$185 million. (July 04, 2023)

MARKET INSIGHTS & RESEARCH

Articles

Domestic bond issuances have increased significantly in India. NBFCs have been leading the growth in FY24, with $26 billion+ worth of bond issuances in Apr-Jun 2023, 2x higher YoY. The total bond issuances in June 2023 crossed c.$50 billion, of which 68% were issued by the government and 22% by NBFCs (c.$11 billion; c.7% average coupon). Read more.
As India’s population of 1.4 billion people becomes the world’s largest, its GDP is forecast to expand dramatically. Goldman Sachs research projects India could be the world’s second-largest economy by 2075. Read more.
Morgan Stanley estimates the Indian hydrogen market to be worth $19 billion by 2030. Various sectors will contribute to the market, with telecom and city gas distribution companies playing a significant role. Major companies in India, such as Reliance Industries, Indian Oil Corporation, and ONGC, are investing in green hydrogen projects. As per IEA report, transition to clean energy could create a market worth up to $80 billion in India by 2030. Read more.
HSBC: India’s economic performance is not necessarily correlated with other markets, which can help mitigate risk and enhance overall portfolio stability. Due to the unique characteristics of India’s economy, an oversized allocation to India could be beneficial in the long term. Read more.
India could become a magnet for foreign direct investment as per Martin Wolf (Chief Economics Commentator - Financial Times). The global environment is more dangerous and chaotic than prior to 2007, but for India, it also offers opportunities. Read more.

Reports

India is innovating a different model for growth - a technology-led model that is collaborative, equitable, and democratises opportunity at population scale. Wealth won’t trickle down, so the floor needs to be raised. Read India’s Digital Transformation Report 2023 by Nandan Nilekani.
According to PRICE report, India will see a 5x increase in its ‘super rich’ families by 2031 and a large chunk of the growth is expected to come from rural areas. The growth of such households in rural areas was 14.2% vs 10.6% in cities over the last 5 years. Read more.
The government released the ‘15th Finance Commission Report 2021-26’ which gives key finance recommendations for the period 2021-26. The Commission suggested that the centre should reduce fiscal deficit to 4% of GDP by 2025-26. Read the summary.

ICYMI

Reliance Jio set to sign $1.7 billion deal with Nokia for 5G equipment to expand wireless services in India.
Carl Zeiss India, an eyewear and lens company, is investing over €250 million to build the largest spectacle lens production facility in India.
Jaiprakash Associates, flagship company of Indian conglomerate Jaypee Group, defaulted on loans worth $500 million, including principal and interest amount.
India to have billion-plus Middle Class by 2047. The size of the Indian Middle Class will jump from 31% of the population in 2020-21 to 61% in 2046-47. Super Rich population doubled to 1.81 mn in 5 years through 2021.
Reliance Industries (RIL) proposed to buy back shares of Reliance Retail (RRL) at a premium, however it hasn’t been welcomed by a few stakeholders who feel the company should have avoided a forced buyout since the grey market price of RRL shares is quite high (Rs 2,500-2,700) vs the proposed buyout price (Rs 1,362).

KEY INDICATORS

As per the latest UNCTAD World Investment Report 2023, FDI in India rose by 10% to $49 billion but remained flat in overall 'developing Asia' region in 2022. India accounted for c.80% of the FDI flows to the region. India became the third-largest host country for greenfield project announcements and the second-largest for international project finance deals.
India is the best-performing nation amongst all the countries in South Asian region in terms of trade facilitation, as per the United Nations Economic and Social Commission for Asia Paciﬁc's (UNESCAP) report.
India’s S&P Global Manufacturing PMI fell to 57.8 in June from May's 58.7. India's manufacturing industry expanded at the second-fastest rate this year in June supported by robust demand despite higher inflationary pressures. This marked two years of the index being above the 50-mark separating expansion from contraction. The services sector PMI declined to three-month low of 58.5 in June vs 61.2 in May, although still indicating an upturn, stemmed from ongoing increase in new business, a healthy demand environment and marketing initiatives. India's services exports in May climbed 7.7% YoY to $27 billion, while imports rose 2% to c.$16 billion.

WEEKLY MARKET UPDATE (w/c July 03, 2023)

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