India In Sight #14
India In Sight #14
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
[Exit] TPG, Matrix Partners and Norwest Venture Partners sold a partial stake in Five-Star Business Finance, an NBFC lender, for an overall c.$220 million, in a secondary market transaction. (September 1, 2023)
[Exit] Warburg Pincus sold a partial stake in MedPlus Health Services, a pharmacy retail chain, for $73 million. Warburg had initially invested c.$80 million in 2021; redeemed c.$140m since then and has an outstanding stake valued at c. $150m (>3.5x MOIC). (August 31, 2023)
[Exit] TA Associates partially exited its 24% stake in Prudent Corporate Advisory Services, a mutual fund distributor, for c.$50 million. TA Associates had initially acquired c.40% stake for c.$35 million in 2018 (translating to c.5x MOIC). (August 31, 2023)
[Expected] Motilal Oswal Alternates, a domestic PE fund, to invest in SK Finance, an NBFC. The financial details of the transaction were not disclosed. (August 31, 2023)
Morgan Stanley Real Estate Investing partnered with Prakhhyat Group, a Mumbai-based developer, to develop a Class A warehousing project in Bhiwandi and will invest c.$40 million in the project. (August 28, 2023)
[Exit] TPG sold c.5% stake in RR Kabel, a wire producer, in a secondary transaction for c.$60 million, to ValueQuest, White Oak and SBI Life. TPG had initially invested c.$90 million in 2018 for 21% stake (translating to 3-4x MOIC on the partial exit). (August 28, 2023)
[Exit] Tiger Global sold its remaining stake to fully exit Zomato, a food delivery company, for c.$135 million. Tiger Global had invested c.$200 million in 2020 for 5.5% stake in the company and has generated c.$320 million on the investment. (August 28, 2023)
Other Credit Deals and Issuances
Aditya Birla Fashion & Retail, a fashion retailer, to raise c.$90 million through debt bonds on a private placement basis. (September 1, 2023)
GMR Goa Airport to raise c.$310 million through issuance of c.10% NCDs to repay existing debt and fund capex; Credit Saison India raised its first issuance of NCDs for $25 million through private placement.
August 2023 Roundup - Key Deals
KEY FUNDS AND FUNDRAISES
Trifecta Capital, a domestic venture debt firm, to launch its fourth credit fund in early 2024. The target size of the fund has not been disclosed yet. (August 29, 2023)
Keppel Corporation, a Singapore-based asset management firm, to launch a private equity fund, to increase its exposure to India’s real estate market. The size of the fund and the timeline of its launch has not been disclosed. (August 28, 2023)
August 2023 Roundup - Key Funds
MARKET INSIGHTS & RESEARCH
Articles
Abrdn: Policy directionality and geopolitical trends could bode well for India’s long term outlook, driven by key policy areas like - competitive federalism, increasing digitalization and the push for less carbon-intensive growth. Read more.
Robeco: Indian equities are set to benefit from exports and domestic consumption growing simultaneously as long-term reforms, digitalization and rising capital investment combine to increase economic participation and incomes. What drives India’s growth trajectory? Read more.
Sector views: Morgan Stanley lays out the key growth drivers for the Indian retail industry and why the ones who will survive could reap massive gains. Read more.
Reports
The share of NBFC-Infrastructure Finance Companies rose to 55% in the total infra credit in FYE-Mar 2023. The latest ICRA Research report expects NBFC-IFCs to grow by 10-12% in FY2024 driven by government focus with continued growth momentum and sound asset quality to support earnings profile.
ONDC 101: The Open Network for Digital Commerce (ONDC) is government’s initiative to create a facilitative model to help small retailers go digital as well. As per Deloitte research, it provides a huge platform that could drive the growth for four key sectors - financial services, agriculture, manufacturing, and e-commerce retail.
40% of Indian startups with seed funding between $500K and $5 million in 2022 are building for global markets. Peak XV’s (Sequoia) latest report ‘From SaaS to Consumer to Deep Tech, India’s Next-Gen Startups are Building for the World’ explores the next phase of the Indian startups.
KEY INDICATORS
BCG’s ‘India Economic Monitor’ report consolidates key economic stats via a collection of charts and figures for the month of July 2023.
Bank credit to housing as well as commercial real estate sector grew by 38% yoy in July, with the loan outstanding to the realty sector at a record c.$350 billion, driven by the fast pace of housing sales and new launches across major cities.
India's manufacturing PMI in August stood at 58.6 in August, up from 57.7 in July, reaching a three month high. India's manufacturing activity has seen an expansion for 26 straight months, the longest stretch since March 2020. The output of India's eight core sectors grew by 8% in July after hitting a five-month high of 8.3% in June, driven by the increase in production of coal, steel, natural gas, cement, electricity and crude oil.
FDI in India declined by 34% yoy to c.$11.0 billion during April-June 2023 (vs c.$16.6 billion in 2022). Total FDI inflows were $17.5 billion in April-June 2023 (vs $22.3 billion in 2022).
India's fiscal deficit for April-July 2023 stood at c.$75 billion, or c.34% of the annual estimates (vs c.20% during April-July 2022). India aims to narrow the fiscal gap to 5.9% of GDP from 6.4% in the last fiscal.
GST collections grew by 11% to c.$19.8 billion in August on the back of improved compliance and reduced evasion.
Chart in focus: India's favorable demographics - combined with reforms - are powerful tailwinds
Source: J.P. Morgan Asset Management
Working age population growth, 2022-2032, millions
WEEKLY MARKET UPDATE (w/c August 28, 2023)
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