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KEY DEALS
Equity
Ola Electric, a domestic electric 2 wheeler maker, raised $140 million from its existing investors including Temasek which will invest c.$90 million, valuing the company at c.$5.5 billion. (September 7, 2023)
India Resurgence Fund (IndiaRF), the special situations platform of Piramal Group and Bain, acquired the API and CRAMS business of Ind-Swift Labs, a domestic pharma company, for c.$200 million. (September 6, 2023)
[Exit] Investcorp sold its remaining stake in Safari Industries, a luggage maker. Investcorp initially invested c.$10 million in the company in 2021 for a 5.5% stake and has harvested c.$35 million on the investment (translating to c.3.5x MOIC over a period of 2.5 years). (September 6, 2023)
Ather Energy, an electric scooter maker, raised c.$115 million from GIC and Hero MotoCorp, a domestic two-wheeler maker, via rights issue. Hero MotoCorp invested c.$70 million (owned c.35% stake prior to the deal) while GIC invested c.$45 million. (September 6, 2023)
[Exit] Lighthouse Funds fully exited Bikaji Foods, a snacks maker, by selling its remaining stake for c.$20 million. Lighthouse had initially invested c.$30 million in two tranches for c.15% stake and has generated c.$150 million on its total investment (c.40% blended IRR over 9 years). (September 6, 2023)
Welspun One Logistics Parks, a domestic logistics and warehousing assets investor, to invest c.$70 million to develop an in-city grade-A mixed-use warehousing asset in Thane (Mumbai). (September 6, 2023)
MO Alts, the alternative investment arm of Motilal Oswal Group, invested c.$30 million in VVDN Technologies, an engineering company and telecom gear maker. Mo Alts had previously invested c.$40 million in April 2023 and c.$30 million in 2019. (September 5, 2023)
Credit Deals and Issuances
Mirae Asset Credit Opportunities Fund, a South Korea based investment fund, acquired BGR Logistics Park, a warehousing asset near Mumbai, for c.$20 million, to expand its logistics realty portfolio. (September 5, 2023)
Other Credit Deals
State Bank of India raising $750 million by issuance of 5-year US dollar-denominated bonds from JP Morgan, BoFA, Standard Chartered and HSBC. The bonds are likely to be priced at a spread of c.150 bps over 5-year US treasury bonds. (September 8, 2023)
Muthoot Fincorp, a domestic NBFC, raising c.$50 million through issuance of NCDs, priced at c.9% and rated AA-/Stable by CRISIL. (September 5, 2023)
KEY FUNDS AND FUNDRAISES
Unicorn India Ventures, a domestic early stage VC fund, with a target corpus of c.$125 million, marked the first close of its third fund at c.$30 million. (September 5, 2023)
Pentathlon Ventures, a domestic VC firm, raising c.$55 million for its second fund, which will focus on deploying funds across 25 early-stage B2B SaaS startups. (September 5, 2023)
WSB Real Estate Partners (f.ka. Walton Street BlackSoil), a domestic investment firm, marked the final close of its second debt fund at c.$90 million (c.$20 million separately for co-investments). (September 5, 2023)
INDIA x FINTECH
The RBI governor announced 5 new payments solutions at the 4th Global Fintech Fest 2023 (GFF 2023) - a conference for the various stakeholders of the global fintech landscape attended by over 65K participants from over 100 countries.
UPI crossed 10 billion transactions (in a single month) in August (c.$190 billion in value). UPI contributes c.75% of all digital payments in the country. With a network of 300 million UPI users making payments to 40 million merchants who accept UPI payments, the market is headed towards credit on UPI as the next step. With banks and fintechs looking to integrate their cards with the Rupay-UPI network, UPI credit could drive the next 200 million credit card users.
India has been at the forefront of fintech innovation, being the 3rd largest and one of the fastest growing fintech markets globally. Indian fintech revenues are expected to grow by 35%+ annually to reach over $190 billion by 2030. BCG and Matrix Partners’ joint report ‘State of the Fintech Union 2023’ provides a detailed account of the Indian fintech industry.
India has over 10K fintechs and c.$18 billion in cumulative fintech funding since 2020. But is this growth inclusive for key sections of the society? Startup India’s report on ‘Growing inclusion in India’ discusses the impact of the fast growing fintech industry on the key pain points of the Indian economy.
Global fintech revenues could reach $1.5 trillion by 2030. BCG’s latest report - ‘The Second Wave Resilient, Inclusive, Exponential Fintechs’ unpacks the global fintech trends and provides insights on the growing Indian fintech industry and its relevance in the global context.
While India has advanced in its payment solutions landscape, yet, most of them might not be inclusive as they cater largely to digitally savvy users. NPCI’s ‘Conversational Payments on UPI’ report talks about the potential of AI as a solution in building pathways to a safe and user-centric payment experience.
‘The Rise and Evolution of India’s Digital Finance’ by TransUnion CIBIL, explores the profound impact of digitalization on India's financial services industry and the evolving consumer behaviors.
MARKET INSIGHTS & RESEARCH
Articles
RBI is considering allowing the settlement of domestic sovereign debt on the Euroclear platform, which could expand the overseas investor base for domestic debt and eventually lower the borrowing costs. Read More.
International investors bought bonds worth c.$550 million (net) in August under the 'Fully Accessible Route' (FAR), as the recent sell-off provided attractive entry points and the renewed expectations of the country's inclusion in a global bond index spurred the pace of Indian government bond purchases. Read More.
International investment in alternative assets in India reached c.$2 billion in the last 5 years (c.80% of the total investment in alternatives) driven by the investors’ need for new markets and opportunities to diversify their portfolios. Read More.
Reports
Bain’s ‘Energy and Natural Resources Report 2023’ report is an annual survey on the energy transition trends and offers insights into the energy transition market, highlighting that while the executives are increasing investments in low-carbon businesses, they are skeptical of consumers’ willingness to pay more.
JMK Research-IEEFA’s latest report on ‘The rooftop solar commercial and industrial market in India’ discusses the emerging trends and opportunities in the rooftop solar market.
SBI’s latest research paper explores the trend of asymmetric transmission from monetary policy to rate transmission in Indian money markets, G-sec market and bank credit.
ICRA’s Monthly Research Compendium offers a multi-sector summary of latest data and reports released in August.
KEY INDICATORS
India’s service sector activity eased to 60.1 in August vs 62.3 in July, driven by a rise in new export business.
India could become a developed nation by 2047 at a growth rate of 8-9% for the next 20 years. India could benefit from the "China plus one" strategy and could attract investments of c.$100 billion by 2040.
India's external debt decreased to 18.9% of GDP in FYE-Mar 2023, down from 20% in FY 2022. The external debt stood at c.$625 billion, up by a marginal c.1%. with commercial borrowings accounting for c.90% of the total external debt.
ICYMI
India hosted the 18th G20 Summit 2023 in New Delhi; achieved consensus on the New Delhi G-20 Leaders’ Summit Declaration that includes plans to strengthen multilateral development banks, a way forward for regulating crypto currencies and the use of digital public infrastructure for financial inclusion.
Government approved $470 million viability gap funding for setting up a battery energy storage system. The fund will be released in five tranches till 2030-31 and help in creation of 4,000 MW hours storage.
PepsiCo India to invest $105 million to set up a food-focused manufacturing plant in Assam.
Nvidia to partner with Reliance Industries and Tata Group to develop AI-powered supercomputers and AI clouds in India.
WEEKLY MARKET UPDATE (w/c September 4, 2023)
Equity fund inflows surged by 165% to $2.5 billion in August; Large-cap funds continued to see outflows while demand for small-cap funds increased.
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