India In Sight #22
India In Sight #22
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] Temasek sold c.1.2% stake in Zomato, a food delivery platform, for c.$100 million. Temasek first invested in Zomato in 2015 and has bought and sold its shares multiple times since then with the remaining stake valued at $660 million (translating to 1.4x MOIC on its investment in the last 11 months). (October 27, 2023)
OTPP to acquire a minority stake in XpressBees, a logistics-tech unicorn. OTPP has been considering c.$100 million investment in the company at $1.4 billion valuation, however the financial details were not disclosed. (October 27, 2023)
Niva Bupa, a health insurance company, raising $96 million from Temasek and Indian PE firms Paragon Partners and Motilal Oswal Alternates. (October 26, 2023)
General Atlantic to acquire a minority stake in TBO Tek, a traveltech company, from Affirma Capital in a secondary deal transaction. The transaction amount has not been disclosed. Affirma is expected to make c.9x MOIC on its partial exit. (October 23, 2023)
Credit
Adani Group looking to raise c.$4 billion to develop low-cost green hydrogen manufacturing plants and is in preliminary discussions with local and global banks for financing. (October 27, 2023)
Ola Electric, an EV manufacturer, raised c.$385 million in a mix of debt and equity from State Bank of India and Temasek. The company raised c.$240 million from SBI in debt while Temasek invested c.$140 million in equity with the rest of the equity corpus being raised from family offices. (October 26, 2023)
Edelweiss ARC, secured c.$80 million in debt financing from Farallon Capital through issuance of NCDs at 14.5% for a duration 18 months. (October 26, 2023)
PMI Electro Mobility, an electric bus manufacturer, raised c.$30 million in convertible securities from the performing credit fund of Piramal Alternatives, Piramal Group’s fund management arm, for its green mobility initiatives. (October 25, 2023)
Husk Power Systems, a green energy firm, raised c.$103 million in a mix of debt and equity. Husk Power raised c.$60 million in debt, led by European Investment Bank and IFC. It raised c.$43 million in equity from STOA Infra, US DFC and other impact investors like Proparco and FMO. (October 24, 2023)
Other Deals and Issuances
SBI to raise $1.2 billion through issuance of long dated tier-2 bonds.
KEY FUNDS AND FUNDRAISES
ValuAble, a new domestic venture debt firm, is looking to raise its maiden fund for c.$100 million to invest in technology-driven and inclusive startups in India and globally. (October 26, 2023)
Global Energy Alliance for People and Planet, a philanthropic platform, is raising c.$15 million for its new VC fund to back green energy startups in India as a part of its $1.5 billion investment plan. GEAPP is expected to raise $10 billion by prominent global institutional investors, to address climate change and promote energy transitions. (October 25, 2023)
OrbiMed, a healthcare-focused PE firm, raised $4.3 billion across three new funds to invest in healthcare and lifesciences companies. Orbimed will invest in India via its Asia-focused fund (c.$1.1 billion target). (October 25, 2023)
Edelweiss announced the final close of its third special situation fund at c.$1 billion. The fund has allocated more than 40% of its capital in eight transactions across sectors like roads, steel, paper, hotel and real estate. (October 23, 2023)
MARKET INSIGHTS & RESEARCH
Articles
PE and VC investments rose by 60% yoy to reach c.$13.6 billion across 209 deals in July-Sep quarter, as per the EY-IVCA report. The deal value decreased by 5% vs April-June. Deal numbers were down 18% yoy, but 31 large deals amounted to $10.7 billion. Read more.
During April-June 2023, LP commitments for India focused PEVC funds, registered in India, dropped to $840 million vs c.$9 billion in the previous quarter. Lowest commitments registered since Q1’2021. The dry powder for the same funds stood at c.$58 billion in the quarter ending June 2023 despite deployments of $1.3 billion in the quarter (up 25%). Read more. [Paywall]
Capex of 17 major states surged by 45% in the fiscal's first five months to reach c.$21 billion. The Centre disbursed $6.7 billion of interest-free loans to states in H1FY24, 57% of the FY24 sanctioned amount. Read more.
India is the largest project funding market for the Asian Infrastructure Investment Bank with over 20% of AIIB's total funding allocated to India. AIIB has funded $10 billion in Indian infrastructure projects since December 2015 with $1.3 billion invested this year. Read more.
Abrdn research suggests that JP Morgan's inclusion of Indian bonds in its emerging-market index could boost India's forex and bond sentiment. Many investors are likely to allocate to Indian bonds ahead of the official 2024 inclusion. Read more.
The focus is shifting from roads to railways and waterways to achieve Net Zero by 2070. An enhanced limit for priority sector lending to incentivize banks and tax incentives for investment in green bonds are some of the required steps that could reduce the emission intensity of the transport sector. Read more.
The government tightened the disclosure rules for LLPs, which will now be required to maintain the details of partners’ beneficial interests and both tangible and intangible contributions. Read more.
Reports
Technology and systemic factors are driving rapid transformations in India's traditionally slow-evolving healthcare sector, leading to innovative, patient-centric healthcare models in India. The ‘New age healthcare delivery models’ report by KPMG attempts to capture the emerging healthcare delivery landscape in India.
The EY-FICCI survey lays out the trends in the cloud and data market in India. 78% of organizations are adopting cloud strategies for tech modernization. However, concerns include rising costs, with only 20% of the large firms optimizing costs and a 75% talent shortage affecting cloud transitions.
The latest IEEFA report suggests that replacing natural gas consumption with biogas and biomethane to c.20% by 2030 can help India cut natural gas import bills by $29 billion between 2025 and 2030.
The SBI research paper provides insights into the PM SVANidhi Scheme that offers collateral-free loans to urban street vendors, promoting financial inclusion, transforming spending patterns and boosting credit growth at the grassroot level. Data indicates increased spending and digital transaction habits post-loan receipt.
KEY INDICATORS
India's economy is projected to rank third by 2030, behind only US and China, as per S&P Global. The economy will jump from $3.5 trillion in 2022 to $7.3 trillion, overtaking Germany and Japan.
India's economic growth is fueled by robust private consumption, with investment demand emerging as a new growth driver. While fiscal health remains stable, global uncertainties and weather pose risks.
Individual ITR filings surged 90% from 33 million in AY 2013-14 to 63 million in AY 2021-22, highlighting a broadening tax base. The government’s direct tax collections are expected to cross c.$237 billion in the current FY with c.82 million returns.
ICYMI
Taiwan's Wistron Corp to sell its Karnataka plant to Tata Group for $125 million, paving the way for Tata to produce iPhones in India. Regulatory approval pending.
India's Epsilon Advanced Materials to set up a $650 million battery materials plant in US by 2026, aiming to supply 1.1 million US EVs.
WEEKLY MARKET UPDATE (w/c October 23, 2023)
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