India In Sight #23
India In Sight #23
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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As we break for Diwali this weekend, next edition of India In Sight will be out on Nov 20th. Happy Diwali!
KEY DEALS
Equity
[Exit] Morgan Stanley PE and Banyan Tree collectively sold c.25% stake in Nspira, an education services company and subsidiary of the Narayana Group, in a buyback deal for c.$160 million. The transaction was financed by debt from Barclays, GIC and Axis Finance at c.13%. MSPE and Banyan Tree had invested c.$75 million in 2018 (c.20% IRR). (November 3, 2023)
Blackstone acquired c.75% stake in Care Hospitals, a hospital chain in Hyderabad, from TPG for c.$700 million.
Blackstone to additionally invest $300 million and TPG to invest $100 million to help Care Hospitals to acquire KIMS Health, a Kerala based healthcare firm, from True North, a domestic PE firm. True North invested c.$200 million in KIMS in 2017 and will be fully exiting its c.40% stake. (October 30, 2023)GIC and Gentari, a clean energy solution company of Malaysia based Petronas Group, to invest c.$1.8 billion in AM Green Ammonia, a clean energy producer owned by Greenko Group founders, at a valuation of c.$5.0 billion. Gentari will invest c.$1.5 billion for 30% stake while the founders and GIC will invest c.$250 million and will hold the remaining 70% stake. (October 30, 2023)
I Squared Capital, a global infrastructure fund and Amplus Energy Solutions, a clean energy solutions firm, to jointly set up Hexa Climate Solutions, a climate and green energy solutions platform. I Squared Capital to invest c.$500 million in the platform. (October 30, 2023)
Aequs, an aerospace components manufacturer, raised c.$54 million in an equity round led by Amansa Capital. Other investors include Steadview Capital, Catamaran and Sparta Group. (October 30, 2023)
Credit
Adani Green Energy, the renewable energy arm of the Adani Group, looking to raise c.$1.8 billion in debt from global banks for the expansion of their solar and wind projects. (November 2, 2023)
IRB Infrastructure Trust, a privately held InvIT of IRB, completed the refinancing for five of its build-operate-transfer (BOT) projects, reducing the interest rate from 9.7% to 8.6%, which could lead to savings of $125 million over five years. (November 1, 2023)
Other Deals and Issuances
Rural Electrification Corporation, to raise c.$300-500 million in yen-denominated green bonds to fund its green loan portfolio; Reliance considering to raise c.$1.8 billion via the sale of local-currency bonds; India Exim Bank listed its first 10-year sustainability bond, valued at $1 billion, on the London Stock Exchange.
October 2023 Roundup - Key Deals
KEY FUNDS AND FUNDRAISES
Investcorp, a Bahrain-based investment firm, plans to deploy c.$5 billion in India in the next five years to grow its private equity and real estate AUM. (November 3, 2023)
Kotak Alternate Asset, an alternative asset management arm of Kotak Mahindra Group, raised c.$120 million for its open-ended equity fund - Kotak Iconic Fund, that will invest across diversified active and passive equities. (November 1, 2023)
Ares marked the final close of its sixth Asia focus fund at c.$2.4 billion to invest in special situations and distressed assets in India and Asia. (November 1, 2023)
October 2023 Roundup - Key Funds
MARKET INSIGHTS & RESEARCH
Articles
Recoveries under India's IBC rose to 33% of admitted claims in Q2 (vs 30% in Q2), driven by SME interest and Srei Group asset realizations, totaling to $2.6 billion from 85 firms, exceeding fair and liquidation values. Read more.
Latest RBI data suggests that the central government’s market borrowing through bonds crossed the $1.25 trillion mark, doubling from 2017 due to escalated government borrowing beginning in 2020. Read more.
India's inaugural 50-year bond auction worth $1.2 billion attracted strong investor demand from insurers and pension funds. The bonds were sold at a cutoff yield of 7.46%. Read more.
India is a hotspot for strategic risk management investment amid global geopolitical unrest, offering stability for global companies in uncertain times, as per Manny Maceda (Global CEO, Bain & Co.). Read more.
India's food processing sector is emerging as a ‘sunrise industry’ as it attracted c.$6.3 billion in FDI in nine years, with exports also up by 150%, highlighting the fast growing industry and inviting global investments. Read more.
India's key airline companies ordered c.1,000 jets in 2023, committing billions of dollars in investment for airplane orders and airport expansions, indicating India's aviation sector growth, signaling economic growth and increased global connectivity, driven by its ascending middle class. Read more.
Reports
The alternative investment asset class (including AIFs and PMSs) could grow by 3x by 2028 with AUM reaching c.$500 billion vs c.$170 billion today. The alternative assets saw a growth of 26% in the last five years with AIFs and PMS industry growing by 36% and 16% respectively. Complete report here.
ICRA’s report lays out the financial markets and banking landscape in India. Corporate bond spreads remain narrow despite tighter liquidity conditions. Bond issuances declined in Q2FY2024 and Net FII inflows eased to $6.4 billion. Gross FDI stood at $4.6 billion in Q2 (up 20% yoy) with LRS outflows on track to complete a record year as India's fiscal outlook remains stable. ICRA’s report on Structured Finance rates securitized pool collections as strong, supported by a good operating climate with an overall stable outlook.
India's economic ambitions hinge on developing a deep, efficient corporate bond market to enable long-term financing, necessitating regulatory reforms to boost liquidity and competition. ORF’s ‘An Underdeveloped Corporate Bond Market’ report highlights the urgent need to build a robust ecosystem to facilitate the growth of market-based debt raising.
India's energy transition, aiming for net-zero by 2070, involves massively scaling renewables to meet growing demands while balancing economic growth and community welfare, requiring cross-sector collaboration and significant investment. ORF report provides insights on India’s future with people-positive energy transition.
DeFi's complex landscape, from cryptocurrencies to blockchain, is in a "crypto winter," potentially leading to more efficient, accessible private market investing. ‘Demystifying DeFi’ report by ORF provides insights into digital money era and the future of decentralised finance.
KEY INDICATORS
India's service sector growth slowed to a seven-month low in October with S&P Services PMI at 58.4, impacted by competition, demand issues, and rising price pressures, impacting future business confidence.
India's GST revenue reached $21.5 billion in October, up by 13% yoy, amid strong festive sales, marking the second highest collection till date.
India's Index of eight core industries grew by 8.1% in September (vs 12.1% in August), with coal, steel, and electricity sectors driving the growth.
UPI saw a record 11.4 billion transactions worth c.$215 billion in October, an 8% increase from September, driven by festive purchases.
ICYMI
Zurich Insurance to acquire 51% stake in Kotak General Insurance for c.$500 million. The firm will acquire additional 19% stake within three years from this transaction.
AU Small Finance Bank to acquire Fincare SFB in an all-share deal worth c.$530 million. The merger will help AU enter the microfinance business.
WEEKLY MARKET UPDATE (w/c October 30, 2023)
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