India In Sight #34
India In Sight #34
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.8% stake in Manipal Hospitals, a multispecialty hospital chain, to Mubadala, Novo Holdings, and California Public Employees’ Retirement System for an estimated c.$400 million. Temasek had 60% stake in the company after it acquired an additional stake in a c.$2 billion deal in 2023. Financial details have not been disclosed for the latest transaction. (February 03, 2024)
[Exit] Phi Capital sold its entire stake in Pricol, an automotive OEM manufacturer, for c.$15 million. The PE firm invested in the company in 2011 and has harvested c.$35 million across tranches (13x+ MOIC over 12 years). (February 02, 2024)
[Exit] KKR sold c.5% stake in Indus Tower (Bharti Infratel), a telecom tower company, for c.$350 million. CPIBB also sold its c.2% stake for c.$160 million. KKR had first invested c.$635 million in the company in 2017 and has exited with a 20%+ haircut on its investment. (February 02, 2024)
[Exit] Temasek sold its remaining c.5% stake in Policybazaar, an online insurance aggregator and broker, for c.$300 million. Temasek had first invested in the company in 2015 and has generated c.15x MOIC on the investment. (February 01, 2024)
[Expected] Brookfield Asset Management looking to partially exit its clean energy assets in India with a combined capacity for 1.6 GW at a valuation of $1.2 billion. (February 01, 2024)
Annapurna Finance, a micro finance company, raised c.$40 million in equity from Piramal Alternatives, the fund management business of the Piramal Group, at a valuation of c.$360 million. (January 31, 2024)
Arzooo, a retail technology platform, raised an undisclosed amount in extended Series B round from SBI Investment, Trifecta and 3 Lines Ventures. The company had previously raised $70 million in Series B round in 2022 and is expected to have raised $50 million in the latest round. Exact financial details were not disclosed. (January 31, 2024)
Credit Deals and Issuances
Nirma, a manufacturer of synthetic detergents, is looking to raise c.$440 million in debt via NCDs (priced at 9-10%) for funding the acquisition of Glenmark Life Sciences, a developer and manufacturer of APIs. (February 01, 2024)
Tata Capital Housing Finance, a subsidiary of Tata Capital, is looking to raise c.$1 billion in debt. (January 31, 2024)
January 2024 Roundup - Key Deals
KEY FUNDS AND FUNDRAISES
KKR marked the final close of its Asia Pacific Infrastructure Fund II at c.$6.4 billion, the largest infrastructure fund to have been raised for Asia Pacific. (February 01, 2024)
Cornerstone Venture Partners, a tech-focused VC firm, launched its second fund with a target corpus c.$200 million. The fund will invest $5-10 million each in new-age B2B SaaS businesses (Series A / B). (January 31, 2024)
January 2024 Roundup - Key Funds
MARKET INSIGHTS & RESEARCH
Articles
The government plans to raise $3.7 billion in the current fiscal and $6.2 billion in 2024-25 from capital receipts, including disinvestment and asset monetization, without setting a specific disinvestment target for the next fiscal. Read more.
Indian banks have requested the authorities to ease norms for valuation of additional tier-1 bonds as fund-raising through such instruments has become more difficult due to stricter valuation norms (100 years now vs 5-10 years previously) that were introduced in 2023. Read more.
M&A activity in India is poised for growth, with capital influx from sovereign wealth funds and global investors focusing on acquisitions, greenfield projects, and partnerships, particularly in infrastructure, real estate, and green energy sectors. Read more.
The interim budget aims to support sustainability, inclusive growth, infrastructure improvement, and fiscal prudence, focusing on empowering women, youth, and farmers through innovation and opening India to global investments for financial robustness. Read more.
Reports
As per EY IVCA PE/VC Roundup 2023, India's PE/VC investments declined for a second year by 11% to $50 billion, driven by a 33% drop in deal volume. Startup deals saw a 42% decrease in (472 in 2023 vs 815 in 2022), with values dropping from $18.5 billion to $8.8 billion. Growth stage deals at $17 billion (down 4% yoy) across 147 deals (down 21% yoy). Buyouts deals at $12 billion (up 14% yoy) across 56 deals (vs 53 deals in 2022). Read more.
As per NAREDCO and KPMG report, India's real estate is pivoting towards sustainability, with 82% of new Grade A offices certified as green, and the sector is expected to hit a $1 trillion market size by 2030, growing at c.20% CAGR, fueled by government initiatives and increased investments. $60 billion of PE investment expected by 2047; $2 billion of PE investment in office stock received in 1H2023. Read more.
KPMG’s report- Reimagine digital trust in capital markets: India's capital market is seeing robust growth with significant foreign investment, fueled by technological advancements in trading and an increase in retail participation. With a focus on cybersecurity to foster trust, and the government's push for self-reliance through the AtmaNirbhar Bharat initiative, India is enhancing its innovative capabilities to tackle global economic challenges.
Pharma and healthcare for India@100: a century of change on the horizon: The Indian pharmaceutical industry aims to achieve a target c.$130 billion by 2030 and $450 billion by 2047, in line with the India@100 vision. This growth is expected to be fueled by a strong focus on innovation, global integration, and enhanced healthcare access, supported by talent development and capacity expansion.
CBRE report- The Office Sector's Ascent: Tier-II Cities on the Horizon: India's Tier-II cities are evolving as new hubs for office space demand, driven by IT and e-commerce startups, with significant contributions from BFSI firms and flexible space operators. The office market in these cities is witnessing a shift towards higher-grade developments, underpinned by a growth in supply to 3.4 million sq. ft. and absorption of 1.6 million sq. ft. as of Q3 2023. These cities are also becoming tech talent hubs, supported by educational institutions and attracting flexible workspace providers to meet the rising demand for adaptable workspaces.
CRISIL’s ‘Capital as growth driver’ report: This paper provides insights on India's economic growth which is expected to slow from 7.3% this fiscal year to 6.4% next year due to global economic deceleration and domestic factors, including RBI's rate hikes. Despite short-term challenges like volatile inflation, India is projected to grow at an average rate of 6.7% annually until 2031, driven by government-led capital investments and infrastructure development.
INTERIM BUDGET 2024
The interim budget capitalizes on a favorable economic environment to boost long-term growth through public investments, rebuild fiscal reserves for future contingencies, and seeks to reduce public debt, thereby creating room for productive expenditures.
7% GDP growth target
FY25 capex outlay increased by 11.1% to c.$138 billion (3.4% of GDP)
Gross government borrowing at $176 billion
Fiscal deficit of 5.8% achieved in FY24, while target of 5.1% and 4.5% have been set for FY25 and FY26
FY25 nominal GDP growth assumed at 10.5%
FDI at $596 billion
$10 billion allocation for national housing scheme
Outlay for steel sector up by 3.5x
Allocation to Electronics and Information Technology sector up by 30%
Sectors in focus: infrastructure, defense, railways, agri, health, solar and renewables
Interim Budget Summary Reports:
WEEKLY MARKET UPDATE (w/c January 29, 2024)
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