India In Sight #36
India In Sight #36
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] Florintree Capital Partners, a PE firm, sold its entire stake in Data Patterns, a defense and aerospace electronics solutions provider, for c.$130 million in a secondary market transaction. Florintree acquired c.20% stake in a pre-IPO transaction in 2021 from OIJIF for c.$10 million (14x+ MOIC over 2.5 years). (February 16, 2024)
[Exit] Fairfax India, a PE firm, sold its entire stake in National Stock Exchange for c.$190 million. Fairfax acquired the stake in NSE in 2016 for c.$27 million (translating to 8x+ MOIC). (February 16, 2024)
[Exit] Carlyle Group sold its c.1% stake in Yes Bank, a private sector bank, for c.$125 million. Carlyle acquired c.10% stake in the company in December 2022 with the remaining stake valued at c.$950 million (c.75% IRR). (February 15, 2024)
[Exit] Temasek sold c.1% stake in Medanta, a domestic hospital chain, for $47 million. Temasek initially acquired c.18% stake in the hospital chain in 2015 (translating to 8x MOIC). (February 14, 2024)
[Exit] Brookfield sold c.22% stake in Data Infrastructure Trust, a domestic InvIT, to existing investors - GIC and British Columbia Investment, for c.$800 million. (February 14, 2024)
[Expected] Samara Capital, a domestic PE fund, is looking to invest in Enovate Biolife, a natural ingredients supplier, for c.$100 million. (February 14, 2024)
Temasek acquired c.8% stake in Prudent Corporate Advisory, a mutual fund distributor, for c.$50 million, from TA Associates. TA Associates initially acquired c.40% stake in the company in 2018 and has harvested c.$120 million across tranches (8x+ MOIC overall). (February 13, 2024)
[Expected] ChrysCapital to acquire c.5% stake in La Renon Healthcare, a pharmaceutical company, for an estimated valuation of c$800 million. The PE fund will acquire the shares from early angel investors and promoter. (February 13, 2024)
Credit Deals and Issuances
IndusInd International Holdings owned by Hinduja Group is looking to secure a loan of c.$1 billion from 360 One Prime, a non-banking financial company and other private credit funds to finance the group's acquisition of Reliance Capital. (February 19, 2024)
Adani Group is looking to raise $2.6 billion through sovereign funds for expansion plans of its airport infrastructure and green hydrogen projects. (February 19, 2024)
Canara Bank raised c.$250 million via issuance of bonds at 8% coupon. (February 14, 2024)
Navi Finserv, a digital lending platform, looking to raise c.$75 million through bonds at 10-11% . (February 12, 2024)
KEY FUNDS AND FUNDRAISES
Aroa Venture Partners, a domestic venture capital firm, launched a new Category II alternative investment fund with a target corpus of c.$50 million. (February 19, 2024)
Julius Baer India, a wealth management platform, launched its maiden India Category III alternative investment fund with a target corpus of c.$35 million. (February 15, 2024)
InCred Alternative Investments, a domestic investment firm, launched its maiden private equity fund with a target corpus of c.$60 million. The fund aims to invest in companies across consumer, financial services, tech and enterprise services sectors. (February 15, 2024)
Capria Ventures, a domestic venture capital firm, is looking to launch its India-focused fund for a target corpus c.$100 million to invest in applied Generative AI startups. (February 15, 2024)
Endiya Partners, a domestic venture capital firm, is looking to launch its third fund with a target corpus of c.$125 million to invest in deeptech, health, SAAS and artificial intelligence startups. (February 14, 2024)
MARKET INSIGHTS & RESEARCH
Articles
SEBI is directing IPO-bound companies to exclude PE/VC shareholders and others planning to sell shares from the IPO pricing process to mitigate their undue influence on pricing, aiming to protect the broader interests of the company and new investors. Read more.
Indian sovereign debt is expected to attract c.$25 billion in foreign inflows in 2024-25 as it joins JPMorgan's GBI-EM index, representing about 10% of the $230 billion index. Despite this, the Indian rupee may see limited appreciation due to the RBI's tight control over the exchange rate. Read more.
The Indian government is engaging with multiple countries to attract their patient capital into India's infrastructure sectors, aiming to sustain economic growth amid slowed public capital expenditure growth. An agreement has already been made with UK to channelize their sovereign wealth and pension funds into India. Read more.
Reports
As per Grant Thornton research, India's corporate sector saw 142 deals worth c.$6.1 billion in January, up 15% in volume and 21% in value from December 2023, driven by strong private equity investments, including two billion-dollar deals (c.$3.6 billion), amid favorable economic conditions and policy expectations. Read more.
CBRE’s India Market Monitor Q4 2023 - Investments report outlines that equity investments in Indian real estate market reached $7.4 billion in 2023 (down c.5% yoy) and $1.3 billion in in Q4 2023, down 59% qoq and 44% yoy (90% domestic capital; majorly developers). The supply pipeline for 2024 remains robust for office sector with the completion of quality investment-grade assets across cities. The I&L absorption to be led by the 3PL and E&M sectors due to the continued adoption of multipolar supply chain strategies by occupiers. Projects in the premium residential segment to witness healthy traction with new launches; mortgage rates are expected to have a relatively muted impact on the demand. AIFs to play a pivotal role in fostering growth and facilitating the execution of projects along with finding and funding new opportunities.
KPMG’s report- Chemicals value chain transition: provides an overview of global chemical markets, pivotal to global economies, is centered around 6,000 commercial chemicals, dominating 99% of the market. Valued at $4.7 trillion in 2022, it's expected to grow at an 8% CAGR over five years, with significant contributions from the automotive and electronics sectors. Major production hubs include China, USA, India, and others, supported by factors like feedstock availability and favorable business policies.
CBRE report: Sustainability - The key to future-proofing real estate highlights sustainability trends within India's real estate domain, emphasizing the office sector. It outlines developers' and tenants' environmental pledges as sustainability gains importance. CBRE provides practical recommendations for companies intent on advancing their eco-friendly practices consistently.
Morgan Stanley’s note on The India opportunity discusses that India's rising population and youthful demographics, coupled with a decade of developing its digital, regulatory, financial, and physical infrastructure, set the stage for economic growth and an increased global presence in the coming decade. Despite the presence of numerous high-quality companies, India's stock remains undervalued in global equity indices, presenting significant prospects for discerning investors who focus on firms with solid financials and growth potential.
Abrdn’s report - Unlocking India’s potential outlines that investing in India balances high growth potential against market volatility. Recently outperforming, India's economic rebound and political stability, along with reforms like the Goods and Services Tax, are driving growth and investor interest. However, risks such as upcoming elections and high valuations, especially in smaller companies, require judicious investment decisions. Despite these, sectors like banking, infrastructure, and consumer-focused businesses offer attractive opportunities.
KPIs
India sees a reduction in its trade deficit and a rise in services exports, leading to revised projections of a smaller current account deficit (CAD) for FY24. Despite expectations of increased capital inflows, the rupee's value may remain controlled as the Reserve Bank of India focuses on accumulating reserves. The period from April to January also recorded a dip in net services exports and a rise in foreign direct investment inflows.
India has shown improvement in 85 Sustainable Development Goal parameters, faced stagnation in 27, and regression in 36, as per a UNESCAP report. Despite data gaps, India outperformed other Asia Pacific countries in 2023, having adequate data for 68% of SDG indicators compared to China's 58% and Vietnam's 66%.
WEEKLY MARKET UPDATE (w/c February 12, 2024)
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