India In Sight #26

Weekly updates on Indian private markets

Dec 05, 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.
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Do not miss the special section on India x Fintech!

KEY DEALS

Equity

Tanas Capital, a Singapore based Asia-focused private equity fund, invested in Kido Education, an international preschool & daycare school chain, that operates schools across India, UK and US. The financial details of the transaction were not disclosed. (December 01, 2023)
[Exit] Alipay, the digital payment platform of Alibaba Group, sold c.3.5% stake in Zomato, a food delivery platform, for c.$400 million. Alibaba has invested over c.$450 million since 2018 across tranches and has monetized c.$780 million till date (translating to c.5x MOIC). (November 29, 2023)

Credit

Adani Group is looking to raise c.$350 million via dollar bonds through private placement in 2024. The funds will be used to refinance RG1 (restricted group 1) bonds worth c.$500 million, due to mature in December 2024. (December 02, 2023)
IIFL Finance, a finance & investment services company, raised c.$50 million as three year external commercial borrowing from Mizuho Bank at c.9%. (November 29, 2023)

Other Deals and Issuances

IIFL Samasta Finance to raise c.$125 million through NCDs at c.10.5% coupon; SBI to raise c.$500-600 million via issuance of AT-1 bonds; Azure Power Global looking to buy back bonds from Azure Power Solar Energy for c.$60 million; Bank of Baroda raised c.$625 million via issuance of infrastructure bonds (part of its $1.2 billion fundraise via infra bonds).

November 2023 Roundup - Key Deals

KEY FUNDS AND FUNDRAISES

Gaja Capital, a domestic PE fund, marked the final close of its fourth fund at $400 million. (December 01, 2023)
Phi Capital, a domestic private equity firm, launched its second fund and is looking to raise c.$250 million for the fund. (November 29, 2023)
ResponsAbility, a Switzerland based impact investor, launched an Asia focused climate fund with a target corpus of c.$500 million. KfW, a German development bank, and FMO, a Dutch development bank, will be the anchor investors for the fund. (November 29, 2023)
LeapFrog Investments, a global climate focused investment fund, to raise c.$600 million for its new emerging markets private equity fund that will invest actively in climate transition in Asia and Africa. (November 29, 2023)
LC Nueva, a joint venture capital fund of Lighthouse Canton and Nueva Capital, marked the final close of its fund at c.$42 million. The fund will focus on early stage investments with a focus on healthtech, consumertech, fintech and edtech. (November 29, 2023)
Pantomath Financial Services, marked the final close of its maiden pre-IPO stage fund at c.$60 million. (November 28, 2023)
True North, a domestic PE firm, raised c.$120 million for its maiden private credit fund. (November 28, 2023)
Peak Ventures, an early-stage VC fund, launched a climate-focused fund in partnership with Sanjay Nayar / Sorin Investments, with a target corpus size of c.$150 million. (November 27, 2023)

November 2023 Roundup - Key Funds

MARKET INSIGHTS & RESEARCH

Articles

A recent OMFIF survey of 20+ global sovereign wealth and public pension funds with c.$4.3 trillion in AUM underlined that c.40% of these global investors are increasingly bullish on India as an investment destination, followed by China and Brazil at 23% each. This shift is due to global regulatory and geopolitical concerns affecting market attractiveness of other major emerging markets countries. Read more.
Private equity, venture capital funds and company promoters have withdrawn over $12 billion from the markets driven by an ongoing rally in the domestic equity markets (Nifty50 up by 10%+ YTD) enabling high returns and reflecting strategic financial movements in a dynamic investment landscape. Read more.
Indian family offices are diversifying into alternative investments seeking 20%+ returns but face challenges like limited liquidity and need for skilled fund managers. The interest in alternatives varies based on maturity, investment objectives and specific investment philosophies. Read more. [Paywall]
Despite a 0.6% hike in policy rates from September 2022 to 2023, Indian companies improved their debt servicing ability, with the interest coverage ratio rising from c.4.5 to c.5.6, even with the weighted average lending rates on new loans increasing from c.8.6% to c.9.4% from during the period. Read more.
ICRA's analysis of Q2 2023-24 for 600 listed non-financial companies showed a notable rise in operating profit margins (up by 398 bps yoy and 64 bps sequentially) which also acted as a driver for the better coverage ratios. Read more.
Investments in Indian government bonds by foreign investors hit a six-year high of c.$1.5 billion in November, anticipating their addition to JPMorgan's index next year, with continued buying expected until June. Read more.
RBI and the Bank of England signed an MoU concerning the Clearing Corp of India, facilitating significant trade in Indian sovereign bonds through London banks. This agreement also sets a regulatory framework for potential $25 billion inflows into Indian bonds by mid-2025, following their inclusion in JPMorgan's global index. India's corporate bond market could grow over 100% by FY30, crossing the $1.2 trillion mark. Read more.

Reports

India Phygital Index 2023: Brands in India are enhancing profitability through omnichannel strategies, focusing on optimized product assortments and efficient omnichannel fulfillment. An insightful blueprint of the Indian omnichannel retail sector.
‘Decoding India’s country’s electronics manufacturing journey’ indicates that India’s organic growth in the consumption of electronics, coupled with the government’s target of achieving c.$300 billion worth of domestic electronics manufacturing by 2025–26 could create a unique opportunity for global firms to view India as the global manufacturing hub, driven by young demographic, massive mobile phone manufacturing capabilities and a rising middle class.
The ‘Global Entertainment & Media Outlook 2023–2027: India perspective’ report outlines India’s position in the global E&M sector. The global E&M industry's growth slowed to 5.4% in 2022, while India grew by 16%, with an expected c.10% annual growth until 2027.
Colliers forecasts a significant upswing in Asia Pacific investment in 2024, with a focus on India and South Korea, driven by active markets, closer buyer-seller expectations, and rising investor confidence. The survey underscores the increasing interest in India led by private consumption and capital formation. Multiple opportunity areas to invest across office, logistics, private credit, residential and data centres ($10 billion investment expected over the next three years). Read more. [Paywall]
The ‘Financial Health - A Strategy For Inclusive And Sustainable’ note emphasizes the importance of prioritizing financial health in developing countries' policy agendas. It offers stakeholders a collection of best practices and guidelines for implementing strategies focused on financial health.

INDIA x FINTECH

A curated collection of key reports and insights in the last few months that provides a comprehensive overview and analysis of India's fintech landscape.

📝 State of the Fintech Union 2023
📝 Mapping a Billion: Understanding the Indian fintech consumer
📝 Fabric of Fintech 3.0: Dissecting the value chain and exploring emerging trends
📝 Growing inclusion in India: The fintech way
📝 The Indian Payments Handbook 2023-28
📝 The Second Wave: Resilient, Inclusive, Exponential Fintechs
📝 FinTech: A force multiplier in our response to the climate emergency
📝 Embedded Finance - A strategic outlook
📝 Building a Sustainable FinTech Portfolio: Experiences and Lessons for Future
📝 State Of Indian Fintech Report Q3 2023: Focus on Consumer Lending [Paywall]
📝 India’s UPI Market: Projections for Growth Under Various GDP Scenarios
📝 The Rise and Evolution of India’s Digital Finance
📝 Conversational Payments on UPI: New frontiers for next-gen payments
📝 The Financial InfraTech Opportunity
📝 OCEN 101: India’s Open Credit Enablement Network
📝 Demystifying DeFi: From blockchain to accessible private market investing

KPI

November 2023 saw GST collections rise to c.$20.9 billion, up by 15% from November 2022, but slightly below $21.5 billion recorded in October.
In October, India's service exports rose by 10.8% to c.$28.0 billion, while imports fell by 0.4% to c.$13.5 billion.

ICYMI

JSW Group and China's SAIC Motor's launched new green mobility JV in India, with JSW holding a 35% stake. The JV aims to boost green mobility and the electric vehicle ecosystem, supporting SAIC's MG Motor India expansion.

WEEKLY MARKET UPDATE (w/c November 27, 2023)

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