India In Sight #07
Weekly updates on Indian private markets
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
Genleap, a US and India-based AI focused genetics testing startup, secured a $50 million commitment from GEM Global Yield, a Luxembourg-based fund. The company is planning to file an IPO and aims to expand into new geographies. (July 14, 2023)
Maxivision Eye Hospital, an eyecare chain, raised $158 million from Quadria Capital, a healthcare focused PE fund, for expanding into Tier-II and Tier-III cities. The investment will be made in two tranches – $73 million in Tranche 1 and $85 million in Tranche 2. (July 12, 2023)
Credit Deals and Issuances
Jindal Steel and Power, a diversified industrials group, is looking to raise c.$3 billion from large global private credit funds and foreign banks, to increase promoter holdings. (July 17, 2023)
State Bank of India, the largest public sector bank, raised $375 million via AT-1 bonds at c.8% coupon, with an additional subscription option of $875 million; Adani Enterprises, the flagship company of the Adani Group, raised c.$155 million through a private placement of NCDs, to develop a liquidity cushion to help with expansion and loan servicing.
KEY FUNDS AND FUNDRAISES
EQT, a Sweden-based large global fund, is planning to invest over $3 billion in India – c.30% of the $11.2 billion BPEA-EQT Asia Fund. (July 13, 2023)
ICICI Prudential AMC’s fund is planning to raise up to $500 million from HNIs and family offices through a private placement. The fund will focus on sectors such as power, logistics, textiles and pharma and will make 3-4 year investments. (July 11, 2023)
LeapFrog Investments, a sustainability focused asset manager, is looking to invest $500 million in companies addressing climate change in Asia and Africa. (July 11, 2023)
MARKET INSIGHTS & RESEARCH
PLI (Performance Linked Incentives) disbursements kicked off in FYE Mar-23 in 8 out of the 14 sectors however most sectors are still in early stages and the major capex wave (of c.$50 billion total capex) is still expected to come in the near term. Read the latest report by ICRA.
Overall PE investments in India declined by 61% in the first half of the year to USD 6.1 billion, lowest in the Jan-June period since 2020, driven by continued global macroeconomic uncertainties and geopolitical headwinds, along with tight credit markets.
PE investment in India’s real estate market rose by 28% to $1.8 billion in the April-June quarter (vs $1.4 billion last year), even amid global recessionary concerns. Read the latest insights in ‘Flux Report 1Q FY2023 - Capital flows in Indian Real Estate’ by Anarock Capital.
Successful adoption of AI is expected to add over a five year period, $20-30 billion in incremental pre-tax profit for the top 500 Indian companies alone. ‘AI in India – A Strategic Necessity’ by BCG lays out a roadmap for improving AI maturity in India, focusing on the organisation’s current maturity level and industry.
Bilateral trade between India and US countries exceeded $191 billion in 2022 (2x vs 2014). As per Janet Yellen (US Treasury Secretary), American companies are investing in manufacturing in India for exports to the US as ‘friendshoring’ is an important foundation for global supply chain resilience and India is an indispensable partner. Read more.
Read the latest macroeconomics and inflation related insights for July 2023 in CRISIL’s Macroeconomics First Cut Report.
ICYMI
The GST Council imposed a 28% tax on online gaming, horse racing and casinos this month. 130+ online gaming companies and other related industries approached the Central government to reconsider the 28% GST on the full deposit value which could impact the growth of the industry.
Tesla is planning to establish an EV factory in India with an annual production capacity of 500K EV and is planning to utilize India as a manufacturing hub to export cars to nations in the Indo-Pacific region.
Foxconn to apply for India chipmaking incentives after it terminated its $19.5 billion JV plans with Vedanta
KEY INDICATORS
India’s WPI-based inflation deflated for the third straight month as it declined by 4.1% in June on an annual basis vs 3.5% in May, driven by fall in prices of mineral oils, food products, basic metals, crude petroleum & natural gas and textiles. However, India’s retail inflation surged to 4.8% in June after hitting a 25-month low of 4.2% in May on an annual basis, driven by higher than expected surge in vegetable prices.
India's Index of Industrial Production (IIP) rose by 5.2% YoY in May 2023 driven by growth in manufacturing, power generation, and mining sectors. Manufacturing output surged 5.7% YoY while power generation grew by 0.9% YoY vs a decline in April. Mining output rose by 6.4% vs 5.1% in May (down by 11.2% YoY).
India's merchandise trade deficit narrowed to $20.1 billion in June vs $22.1 billion in May. Merchandise exports stood at c.$33 billion, while imports were c.$53 billion in June 2023.
WEEKLY MARKET UPDATE (w/c July 10, 2023)
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