India In Sight #13
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
Equity
Zepto, an instant delivery startup, became the latest Indian unicorn as it raised $200 million at a $1.4 billion valuation, in Series E round led by StepStone Group, Goodwater Capital and existing investors. Existing investors include Nexus Venture Partners, Glade Brook Capital and Lachy Groom. (August 25, 2023)
Qatar Investment Authority invested c.$1 billion for a c.1% stake in Reliance Retail Ventures at a c.$100 billion valuation. (August 23, 2023)
[Exit] BPEA EQT sold its remaining c.27% stake in Coforge (f.k.a NIIT), a technology services company, in a secondary market transaction for c.$930 million. BPEA EQT had initially invested c.$880 million for a c.70% stake in Coforge in 2019 and has harvested over c.$2.2 billion across multiple tranches (translating to 2.5-3x MOIC). (August 24, 2023)
[Exit] Apax Partners sold its entire c.10% stake in Mannappuram Finance, a gold loan financier, for $143 million. Apax had invested c.$130 million across two tranches (2017 / 2018); estimated IRR of c.5%. (August 24, 2023)
WestBridge Capital acquired a majority stake in FundsIndia.com, a mutual fund investment platform, from its existing investors. Existing investors included Athera Venture Partners, Foundation Capital and Faering Capital which owned c.80% stake. Financial details for the buy-out were not disclosed. (August 23, 2023)
[Exit] Everstone Capital sold its c.30% stake in SJS Enterprises, an auto ancillary manufacturer, for $66 million. Everstone had initially invested over c.$32 million across two tranches in 2015 and has harvested over c.$160 million till date (translating to a 30-35% IRR / 5-6x MOIC). (August 23, 2023)
Credit
Indiabulls Housing Finance, Indiabull’s housing finance arm, repaid c.$280 million of ECBs raised in 2018 from Barclays, MUFG, Sumitomo Mitsui, CTBC and ANZ. With this, the company completed its repayment of $3 billion ECB loans raised over the years. (August 25, 2023)
IIFL Home Finance, IIFL’s housing finance arm, raised c.$100 million in debt from IFC, to focus on low-income groups, women borrowers and green housing projects. (August 21, 2023)
Other Credit Deals and Issuances
Central Bank of India to raise c.$180 million through issuance of 10-year tier-2 bonds; Mahanagar Telephone Nigam to issue government guaranteed bonds to raise c.$150 million; Power Grid Corporation looking to raise c.$240 million via 10-year bonds.
KEY FUNDS AND FUNDRAISES
Quadria Capital, which is looking to raise $1 billion for its third healthcare focused fund, secured $35 million from DEG, a German development financial institution. Other key LPs, majorly development financial institutions, include IFC, US DFC, Proparco, AIIB and ADB. (August 25, 2023)
AP Moller Capital, a Denmark-based PE firm, to invest c.$750 million in India’s infrastructure sector over the next 18 months; focus on ports, logistics and renewables. (August 25, 2023)
MARKET INSIGHTS & RESEARCH
Articles
Global and domestic distressed funds evaluating a $11.6bn distressed loan portfolio of State Bank of India, that include 330+ accounts. Interested investors include Cerberus, SC Lowy, Arcil, Phoenix (Kotak), JM Financial, Reliance. Read more.
Asset management companies are pushing into private credit in India as HNIs chase yields, after new tax rules cut into returns from other investments. Read more.
The uptick in capex related credit demand is an encouraging sign of the initial stages of an upswing in the capex cycle however external environment could pose a risk, hence making the monitoring of capex related demand crucial. Read more.
Recent food price surges are unlikely to translate into generalised inflation as the government is focused to cap food prices, while ensuring deficits do not rise, to prevent spillover effects from food price shocks. Read more.
Reports
Private credit activity in India continues to witness a strong growth momentum with over c.$4 billion deployed across select transactions during the first half of 2023. EY’s Private Credit in India (H1 2023 Update) report provides insights on private credit fundraise and growth, deal activity, and market outlook for India. Read a quick summary here.
In FY 22-23, the Indian fintech industry disbursed over 70 million loans worth c.$11.5 billion, up 49% in volume and 21% in value vs FY 21-22. The latest report by Equifax captures the trends in fintech retail lending.
Microsoft’s latest report, AI - A Blueprint for India, details the ways India could consider policies, laws, and regulations around AI and how AI is helping address major issues in the country. Read a quick summary of the report here.
India’s Tryst with a Circular Economy report suggests that a circular economy development path could create an annual value of $218 billion in 2030 and $625 billion by 2050, with major focus on agriculture, mobility, and construction. The cost savings could amount to 11% of current Indian GDP in 2030 and 30% in 2050.
The Indian Model of SDG Localization report by NITI Aayog documents and monitors the sub-national experiences in localising the SDGs in India and is a valuable guide to understand how the global goals translate into local actions, benefitting all countries on their journey to achieving the 2030 Agenda.
The BloombergNEF New Energy Outlook India report explores the implications for India’s power, industry, transport, and construction sectors, and charts out the investments and policies needed to help India achieve net-zero emissions.
BNEF base case: $7.6 trillion investment required between 2022 and 2050 ($262 billion p.a.) of which $1.9 trillion in EVs, $1.3 trillion in power grid, $1.8 trillion in power capacity and $1.2 trillion in fossil fuel processes.A research paper titled ‘Effectiveness of the Resolution Process’ compares the performance of the firms in the pre vs post-IBC (Insolvency and Bankruptcy Code) period to understand the impact of the resolution process on the firms.
ICYMI
Indian Oil to invest $30 billion towards energy transition as it plans to initiate comprehensive environmental sustainability measures across its operations.
Taiwan to focus on India as the next growth frontier; 250+ Taiwanese companies have already invested over $4 billion in India. Bilateral trade between India and Taiwan reached c.$8.5 billion in 2022, up 10% vs 2021.
Government considering inclusion of EVs in priority sector, to help funding access as it is mandatory for banks to extend 40% of their adjusted net bank credit to the priority sectors.
WEEKLY MARKET UPDATE (w/c August 21, 2023)
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