India In Sight #16

Weekly updates on Indian private markets

Sep 18, 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.
Subscribe to receive the newsletter every week in your inbox!
Including an interesting article published in Harvard Business Review by Bhaskar Chakravorti and Gaurav Dalmia
Stay tuned, Stay ahead!

KEY DEALS

Equity

[Exit] Everstone sold c.25% stake in Restaurant Brands, the master franchisee of Burger King in India and Indonesia, through open market transactions, for c.$180 million. Everstone invested in the company across multiple tranches since 2013 to acquire c.95% stake; redeemed c.$250 million since then and has a 15% outstanding stake valued at c.$120 million (>4x MOIC). (September 15, 2023)
Kedaara, a domestic PE firm, acquired a significant minority stake in K12 Techno Services, operator of Orchids International Schools, from Peak XV (f.k.a. Sequoia India). The financial details of the transaction were undisclosed, with deal value expected at $150-180 million. (September 14, 2023)
Juniper Green, a renewable energy power producer, raised $150 million in equity from its existing investors that include AT Capital Group, a Singapore-based family office, and Vitol, a Dutch multinational energy and commodity trading company. Juniper had previously raised $200 million from AT Capital and Vitol in 2021. (September 13, 2023)
[Exit] Bain Capital sold majority of its 4% stake in L&T Finance, the financial services arm of the L&T Group, in a secondary market transaction, for $110 million. Bain had initially invested c.$200 million to acquire c.10% stake in 2015; redeemed c.$260 million since then across multiple tranches with an outstanding stake valued at c.$50 million (c.10-12% IRR overall). (September 12, 2023)
India Resurgence Fund (IndiaRF), the special situations platform of Piramal Group and Bain, to invest c.$63 million in Ivy Health and Life Sciences, a hospital chain operator. (September 12, 2023)
KKR invested c.$250 million as additional capital into Reliance Retail Ventures at c.$100 billion valuation, increasing its stake from 1.2% to 1.4%. (September 12, 2023)
Kedaara, a domestic PE firm, invested c.$230 million in Perfios, a fintech-focussed SaaS company. The transaction is a mix of a primary issue and a secondary stake sale. (September 11, 2023)
Touring Capital, an early-growth stage VC fund, led a c.$85 million round in Pixis, an AI-powered software for digital marketers. The new and existing investors who participated in the funding round include Grupo Carso, General Atlantic, Celesta Capital and Chiratae Ventures.

Credit Deals and Issuances

Adani Group, looking to raise c.$3.5 billion to refinance c.$3.8 billion debt taken for its acquisition of Ambuja Cements, a domestic cement producer. (September 13, 2023)
Tata Power Renewable Energy, Tata Group’s renewable energy arm, to raise $425 million in debt funding from the US International Development Finance Corp (DFC), to fund an upcoming greenfield 4.3 GW solar cell plant in Tamil Nadu. (September 11, 2023)

Other Deals and Issuances

Bank of India raised Basel III compliant Tier II 10-year bonds worth c.$250 million at c.8% p.a.; L&T Finance to raise c.$225 million through 10-year NCDs; Credit Access Grameen, an NBFC, raised c.$125 million via c.10% AA- rated NCDs.

KEY FUNDS AND FUNDRAISES

Kae Capital, an early-stage VC firm, marked the final close of its Winners Fund II at c.$50 million. (September 14, 2023)
Artha Group, a domestic VC firm, launched a fund focused on drawing investment from family offices and ultra-high net worth individuals. Artha intends to make 8-10 investments every year. The size of the fund was not disclosed. (September 14, 2023)
Vertex Ventures, a VC firm backed by Temasek, marked the final close of its fifth India and Southeast Asia-focused fund at $540 million, exceeding the target fund size of $450 million. (September 12, 2023)
Xponentia Capital, a domestic mid-market PE firm, raised c.$120 million for its second fund, vs its initial target of $95 million. (September 12, 2023)
Edelweiss Alternates, the asset management arm of Edelweiss Financial Services, launched a new climate and cleantech focused fund with a target corpus of c.$500 million. (September 11, 2023)

MARKET INSIGHTS & RESEARCH

Articles

The demand and supply drivers are positioned favourably for India and are helping to push the country’s growth. However, the country faces barriers to success, including unbalanced growth, unrealized demographic potential, and unrealized ease-of-business and innovation potential. Very interesting piece published in Harvard Business Review. Read more.
PE / VC funds pause on new investments following the recent regulatory change by RBI for Alternative Investment Funds (AIFs). RBI modified ‘Form INVI’ which must now be submitted as soon as the AIFs receive capital commitment from the foreign investors vs the form submission at the time of capital call previously. This has led to the inability to issue partly paid units. Moreover, AIFs that have declared final close can’t issue new units. Read more. (paywall alert)
With over 1.2 billion Indians with a unique digital identity today and a robust technology stack and a growing UPI ecosystem, India has been using technology to transform its economy, boosting its ability to continue growing faster than other major economies. Schroder’s latest research discusses how technology is transforming India’s economy. Read more.
While the world is facing higher interest rates since over a year, China has cut rates, and the economy has entered deflation territory as the debt crisis deepens. With India’s GDP and other economic indicators doing well vs China, the world is shifting its attention from China to India. Is this a reversal of fortunes for the two nations? Read more.
India's services sector has the potential to drive growth and job creation in other sectors like manufacturing and agriculture and could help generate c.70 million jobs over the next decade. Read more.

Reports

Global economy to weaken in coming years but economists bullish on India’s growth as per World Economic Forum’s latest report that summarizes the emerging trends of the current economic environment and identifies priority action areas for policymakers and business leaders.
India’s electrical machinery and equipment sector exports increased from c.$11 billion in 2012 to c.$19 billion in 2021. CII’s report ‘Enhancing competitiveness of India’s electronic exports’ discusses the trends in the Indian electronics sector, the competitiveness of products, and the recommendations to increase the competitiveness of the industry.
‘The Indian Spacetech’ report by Inc42 establishes that the estimated spacetech market opportunity could reach over $77 billion by 2030. India is home to 150+ spacetech startups currently that cumulatively secured c.$285 million in funding in 2022. (paywall alert)
NITI Aayog’s report on advanced chemistry cells battery reuse and recycling, assesses the perspectives of domestic and international battery recyclers on the evolving market, technology needs as well as opportunities and barriers for investment in India.
NITI Aayog’s ‘Towards Decarbonising Transport 2023’ report analyses the current state of decarbonisation and climate ambition in the transport sectors of G20 countries and seeks to support global discussions surrounding sustainable transport.
‘India Skills Report 2023’ by CII examines the strategic overview of India’s skills and talent economy by 2030 including the shifting employability trends and industry forecasts.
ICRA compiled industry snapshots on banking, apparel & fabric, and pharmaceutical sector in India.

KEY INDICATORS

India’s trade deficit widened to a 10-month high of c.$24 billion in August, down 2.8% yoy. India's imports reached c.$59 billion, while exports rose to a three-month high of c.$35 billion, resulting in the deficit.
India’s industrial output rose by 5.7% in July (vs 3.7% in June) driven by growth in mining, manufacturing and electricity production.
India created 52 million formal jobs in the last four years, 47% of which were first jobs.
Advance tax collections in 1H FY2023-24 rose by 20% vs last year, reaching c.$44 billion, and are expected to go further up.
Passenger vehicle sales in India rose by 9% yoy in August driven by significant growth in utility vehicle and three wheelers sales.

ICYMI

Total Energies could invest c.$700 million in Adani Green’s projects as part of its drive to expand its portfolio of clean energy projects.
Tesla looking at sourcing EV-related components worth about $1.9 billion from India.
Coal India to invest c.$3 billion on over 60 First Mile Connectivity (FMC) projects in an attempt to boost eco-friendly coal transportation; projects to have a combined capacity of 763.5 million tonnes per annum (MTPA) on completion.
Dixon Technologies, a contract manufacturing firm, is setting up a large assembly facility for Xiaomi, with a capacity to produce up to 1 million smartphones per month. Dixon to invest c.$50 million for the project.
Oil India looking to invest c.$3 billion to achieve its net zero goal by 2040, in areas including 2G ethanol, green hydrogen, compressed biogas (CBG) and solar power, of which $1 billion will be allocated to the second generation ethanol space.

WEEKLY MARKET UPDATE (w/c September 11, 2023)

Thank you for reading India In Sight!
Read our other editions here.

Disclaimer:
The content provided on this platform contains references and links to external sources, including articles, reports, websites, images, or videos. We do not own or claim copyright over the content found in these external sources. The ownership and rights of the content belong to the original creators.
This post and the information presented are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and affiliated persons and companies assume no liability for this information and no obligation to update the information or analysis contained herein in the future.