India In Sight #28
India In Sight #28
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
Investcorp, a Bahrain-based alternative asset management firm, invested c.$42 million in Canpac Trends, a packaging company. (December 15, 2023)
[Exit] Multiples PE, a domestic PE firm, sold c.2% stake in PVR Inox, India’s largest movie theatre chain, for c.$40 million in an open market transaction. Multiples first invested in PVR in 2012 and has invested multiple times across tranches (c.2.5x MOIC on its latest exit). (December 15, 2023)
[Exit] General Atlantic sold c.10% stake in KFin Technologies, India’s largest securities registrar and transfer agent, for c.$100 million. General Atlantic first invested in KFin in 2018 and has harvested c.$325 million till date, with the remaining stake valued at c.$410 million (translating to c.20% IRR). (December 15, 2023)
[Exit] Softbank sold its remaining stake in Policybazaar, an online insurance aggregator and broker, for c.$110 million, in a secondary market transaction. Softbank had invested c.$200 million in the company in 2019 and has harvested c.$600 million till date (translating to c.3x MOIC). (December 15, 2023)
Udaan, a B2B e-commerce start-up, raised c.$340 million in Series E funding round led by M&G Plc and other existing investors - Lightspeed Ventures and DST Global. The funding round included fresh capital infusion and conversion of existing debt into equity. (December 14, 2023)
[Exit] Warburg Pincus and Creation Investments sold their stake in Fusion Microfinance, a microfinance and MSME loan provider, for c.$43 million (c.4x MOIC) and c.$25 million (c.5x+ MOIC) respectively. (December 14, 2023)
[Exit] Bain Capital sold c.1% stake in Axis Bank, a private sector bank, for c.$450 million. The PE firm invested in Axis Bank in 2017 for a c.5% stake and has harvested c.$1.3 billion over the past year. (December 13, 2023)
Aye Finance, a micro-enterprise fintech lender, raised c.$37 million in Series F funding led by BII. Other investors in the round included Waterfield Partners and A91 Partners. The company has raised c.$125 million in equity from multiple investors. (December 13, 2023)
Vegrow, a B2B agritech platform, raised c.$46 million in a Series C round of funding led by GIC. Other investors include Prosus Ventures, Matrix Partners, Elevation Capital and Lightspeed Ventures. The firm is valued at c.$290 million post the transaction. (December 13, 2023)
[Exit] ChrysCapital, a domestic PE firm, sold c.4.5% stake in Mankind Pharma, a pharmaceutical company, for c.$395 million. ChrysCapital invested c.$330 million in Mankind in 2018 and monetized c.$130 million in the company’s IPO in 2023, with the remaining c.3% stake valued at c.$265 million (3x+ MOIC in latest transaction). (December 12, 2023)
[Expected] Blackstone looking to sell c.50% stake in PGP Glass (f.k.a Piramal Glass), a glass bottle manufacturer and packaging company. Blackstone bought 100% stake in the company for c.$1 billion in 2020. (December 11, 2023)
Credit
Jayaswal Neco, an auto component manufacturer, raised c.$385 million via issue of NCDs (5 year duration at c.18% coupon rate) from Kotak Strategic Situations Fund (c.$185 million), Edelweiss Special Opportunities Fund (c.$90 million), Allianz Credit Fund (c.$85 million) and four other Indian corporates (c.$25 million). (December 15, 2023)
Shriram Finance, a non-bank financial company, to raise c.$500 million though an offshore vehicle, to extend loans to MSMEs in India. IFC will invest c.$150 million and the balance c.$350 million will be invested by other institutional investors in the form of quasi-equity loan. (December 11, 2023)
Other Deals and Issuances
Bank of Baroda looking to raise c.$310 million by issuing Basel III compliant bonds; HDFC Bank looking to raise c.$1.2 billion through issuance of infrastructure bonds at 7-8%; JSW Steel USA looking to raise c.$145 million through issuance of bonds to a local port authority; Adani Green Energy looking to raise c.$410 million through issuance of bonds to refinance dollar bonds due in December 2024.
KEY FUNDS AND FUNDRAISES
Asha Ventures, a domestic impact-focused venture capital firm, marked the first close of its maiden fund at c.$50 million. The fund has a target corpus of c.$100 million.
Portfolio In Focus: OTPP and OMERS
OTPP and OMERS India Portfolio: c.$2bn+ AUM each. Key investments over the years:
MARKET INSIGHTS & RESEARCH
Articles
India’s private sector capex hit a record c.$80 billion in first half of FY24, up 40% from the ten-year average, showing robust confidence in long-term growth. Read more.
India's manufacturing industry could reach $1 trillion by 2025-26, driven by automotive industry, which is attracting global corporates like Tesla and Ford to set up their production bases in India. Electronics manufacturing, especially smartphones, is also witnessing a huge surge in investments. Read more.
AZB Partners’ research on private placement over a public platform signifies that Indian startup ecosystem is increasingly embracing 'equity based crowdfunding', where tech platforms connect startups with retail investors for early-stage funding, offering an alternative to traditional VC, and explores the increased need of scrutiny for such platforms.
The total market cap of Indian VC-backed public firms crossed c.$50 billion, however India's share in global VC investments stood at 3.3% in 2023 vs 5.5% in 2019. Read more.
Reports
CRISIL’s report ‘No ifs about AIFs’ provides insights in the Indian AIF landscape that ranks as the third-largest global ecosystem, supported by PE-VC investments and a tech-centric approach. Indian AIFs have gained traction in the past five years, with cumulative commitments growing at c.38% CAGR.
BCG paper on Financial services innovation for Bharat lays out that over 65% of India's population in rural and semi-urban areas, contributing 47% to GDP, faces challenges like low financial literacy and limited formal credit access. BCG and RBIH propose a framework focusing on technology, strategy, and local insights to drive financial innovation and inclusion in these regions.
CBRE’s report ‘BFSI firms turbocharging Indian office realty’ explores the in-depth analysis on the rapidly changing commercial real estate landscape within India's BFSI sector and provides insights into both sectors and their correlation. c.20% of Global Capability Centre (GCC) employees in India are employed in the BFSI sector with BFSI GCCs having grown at a CAGR of c.7% between 2011 and 2021.
BCG report on Capability & Innovation Hubs (CIH) provides insights into the global CIH market with global spending set to rise to $715 billion by 2027. India is the largest market with ~30% of overall share growing at 15%+ and could reach c.$115 billion by 2027.
State of automotive Global Capability Centres (GCCs) in India report highlights the evolving landscape with the automotive industry's focus on EVs and sustainability, Indian Global Capability Centers (GCCs) have expanded from 7 to 60+ since the early 2000s, now generating over $3 billion in revenue and employing c.110k people, signifying India's growing impact in global automotive innovation and R&D.
CBRE’s report ‘Sustainable Energy: Powering India’s offices’ provides insights into the Indian renewable energy sector and its impact on Indian commercial office space, addressing India's shift towards its 2030 goal of 50% energy from renewables, and exploring the role of real estate in achieving ESG compliance.
Avendus report on the rise of the Indian challengers in the Global Cardiovascular Devices market highlights that India's cardiovascular device market has grown to a a c.$200 million industry, with Indian manufacturers expanding globally. This growth is poised to accelerate into the structural heart devices sector, backed by strong R&D and pivotal global trials, addressing key challenges in affordability and accessibility.
PwC’s Family Business Survey 2023 highlights a shift in trust dynamics for Indian family businesses, emphasizing the need to embrace and communicate ESG and DEI values to appeal to younger stakeholders and maintain their higher trust advantage over other businesses.
BCG India's quarterly banking sector update section provides a collection of reports on comprehensive analysis of India's banking industry, covering macroeconomic trends, key performance metrics, risk management, PSU bank valuations, digital banking adoption, and future projections.
ICRA’s note gives insights about India's vehicle loan securitisation market that is set to hit c.$9 billion in FY 2024, growing in market share to 35-40%, driven by key originators and strong interest from private banks in pass-through certificates for priority sector lending.
Antler’s NEXT 100 piece explores 100 big ideas for start-up founders from India's best investors, operators and founders.
Sector views: ICRA provides quick summary and updates on key Indian industries including copper; state government finances; poultry; retail malls.
KPIs
India's net tax collection for April-November reached c.$133 billion, marking a c.23% increase from last year, with gross collections at c.$158 billion before refunds.
November's wholesale price index rose 0.26%, vs 0.5% deflation in October, with experts forecasting stable wholesale inflation under 2% for the remaining year due to controlled energy and manufacturing costs.
CRISIL’s Economy First Cut report gives a snapshot of the Indian macro landscape - India's CPI inflation climbed to 5.6% in November, propelled by escalating food prices, particularly vegetables, impacting overall inflation and monetary policy amidst demand-supply imbalances.
ICYMI
BNP Paribas sold its local retail broking unit to Mirae Assets for c.$375 million.
Ambuja Cements to invest c.$750 million in 1,000 MW renewable energy projects by FY26, focusing on solar and wind power in Gujarat and Rajasthan, aiming for 60% green energy usage in its push to reach a 140 MTPA production capacity.
WEEKLY MARKET UPDATE (w/c December 11, 2023)
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