India In Sight #18
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] True North, a domestic PE firm, sold c.20% stake in Niva Bupa, a health insurance company, for c.$325 million to Bupa Plc, a UK-based insurance company. True North initially acquired c.55% stake in 2019 and invested in multiple tranches since then; remaining stake valued over c.$800 million (>10x MOIC). (September 29, 2023)
[Expected] WestBridge Capital, an India-focused investment fund, to acquire c.2% stake in Meesho, an online commerce marketplace, in a secondary transaction. (September 29, 2023)
Brookfield partnered with Axis Energy Ventures to invest c.$845 million to setup a renewable energy development platform. (September 28, 2023)
[Expected] Mubadala to acquire a minority stake in Manipal Hospitals, a domestic hospital chain, from Temasek for c.$500 million. Deal not announced yet. (September 28, 2023)
Credit
IFC invested c.$40 million debt in Drip Capital, a trade finance platform. Existing equity investors include Accel, Peak XV and Wing VC. (September 28, 2023)
Adani Ports, the ports division of Adani Group, looking to repurchase its outstanding 3.3% senior notes for c.$195 million from its cash reserves. (September 28, 2023)
Encina Lender Finance, a specialty finance firm, invested c.$50 million in debt in Bright Money, a personalized financial management platform. Existing investors Alpha Wave, Peak XV and Hummingbird VC collectively invested $12 million in equity. (September 27, 2023)
Other Deals and Issuances
NABARD to sell green bonds worth c.$625 million by the end of FY24; HDFC Bank looking to raise c.$1.2 billion via long term infrastructure bonds; Canara Bank raised c.$625 million via c.7.5% 10-year infrastructure bonds; Punjab National bank raised c.$375 million through c.8.5% AT-1 bonds; Power Grid to raise c.$280 million through bonds for its capex needs; MTNL to raise c.$390 million through bonds.
Bajaj Finance, an NBFC, looking to raise c.$1 billion via QIP or preferential issue route. (September 25, 2023)
September 2023 Roundup - Key Deals
KEY FUNDS AND FUNDRAISES
Integrow Asset Management, a domestic real estate asset manager, looking to raise c.$240 million housing-focused alternative investment fund in 2024 (September 26, 2023)
Trifecta Capital, a domestic venture debt fund, closed its third venture debt fund at c.$215 million. (September 25, 2023)
CapitaLand Investment, a Singapore based firm, looking to raise new fund to invest in data center assets in India. The corpus of the data center fund was not disclosed. (September 25, 2023)
September 2023 Roundup - Key Funds
MARKET INSIGHTS & RESEARCH
Articles
The Indian government proposed new angel tax rules that comprise the mechanism to evaluate the shares issued by unlisted startups to investors. Foreign investment will now fall under the ambit of the angel tax, which is essentially the tax levied upon capital received on the sale of shares of a startup above the fair market value. Read more.
India ranks fourth globally among startups that have received more than $50 million in disclosed venture capital investment as per Startup Genome's Scaleup Report. India has the highest scaleup rate with over 50 percent of outreach outside Asia. Read more.
Morgan Stanley expects the Indian smartphone market to reach c.$90 billion by 2032 driven by growing economy, demographic shifts and increasing consumer demand. Read more.
Reports
CBRE’s ‘India Mid-Year Market Outlook 2023’ report provides insights into India’s economic and real estate growth landscape, evaluates the progress made till now and explores the opportunities in the future.
‘India’s potential in the midstream of battery production’ report gives an overview of India’s current state of play in the battery sector and discusses battery supply chain fundamentals that need to be critically assessed to identify India’s strongest comparative advantage.
BCG’s ‘Flattening the Curve’ report dives into the global trends, challenges and opportunities for circular economy, and how businesses must adapt while carving out a space for resilience and growth.
The CBRE ‘The Three-mile Tale’ report outlays the retail warehousing trends from the unique perspective of three critical stages within the supply chain network: the first mile, middle mile, and last mile.
KEY INDICATORS
India to grow at 6.5% this year and for the rest of the decade driven by the adverse global economic conditions.
India’s core sector output rose to a 14-month high of 12.1% in August vs 8.4% in July, indicating strengthening economic activity driven by the recovery in infrastructure industries.
Credit growth in India is expected to moderate to c13% this fiscal, but might improve to c.14% next year as the economy picks up pace. Low demand in wholesale credit, increase in retail credit demand, revival of corporate credit demand to drive credit growth. As per RBI data, credit to industry grew by 6.1% yoy in August 2023 vs 11.4% in 2022. Credit growth to agriculture improved to 16.6% yoy, while it went down in chemicals, food processing and infra sectors.
Central government plans to borrow c.$80 billion through bonds from the market in H2 FY2023. This borrowing plan includes the introduction of a new 50-year tenor bond in response to market demand. The Indian government's total gross debt increased by 2.2% to c.$2 trillion in the April-June quarter with public debt accounted for 89.5% of the total liabilities. India's external debt rose by 2.7% to $629 billion as of end June 2023 vs June 2022.
India's GST collections reached c.$20.4 billion in September, up by 10% yoy. Gross tax revenue in April-August grew by 16.5%, accounting for 35% of the budget estimate for FY24.
India's fiscal deficit for the first five months of the fiscal year, ending in August, reached c.$80.4 billion (c.36% of the annual estimates), representing an increase from the 32.6% deficit reported last year during the same period.
Invest India’s ‘New India Factbook 2023’ report provides a quick overview of the Indian economy along with official facts and stats.
ICYMI
The Indian government aims to generate revenue of around $24.1 billion by monetizing highways in the near future.
British International Investment to invest c.$1 billion in climate-related projects in India by 2026. BII invested over $300 million in climate finance in India last year.
Indian lenders and banks are raising funds via long term infrastructure bonds due to increase in federal government spending. Institutions including SBI, Canara Bank and ICICI bank have raised over c.$3.7 billion via infra bonds in H1 FY2024.
WEEKLY MARKET UPDATE (w/c September 25, 2023)
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