India In Sight #42
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 reports in this edition:
Flex Workspaces: A $9 Bn market opportunity by 2028 by Avendus
Decoding real estate through the spiritual tourism lens by CBRE
How GenAI adoption is set to change the course of Indian healthcare by Inc42
The Indian giant has arrived by Project Syndicate
Read below for insights and links to the reports!
KEY DEALS
Equity
[Exit] Warburg Pincus sold its entire c.2.3% stake in IDFC Bank, a private sector bank, in an open market transaction for c.$145 million. (March 28, 2024)
[Expected] Veranda Learning, an education technology company, is looking to raise c.$140 million in equity as part of its ongoing fundraising round where it raised c.$65 million in debt from BPEA Credit. (March 27, 2024)
[Exit] Olympus Capital, a global PE firm, sold its c.10% stake in Aster DM Healthcare, a healthcare services provider, for c.$238 million. Olympus first invested c.$100 million in Aster DM in 2012 and has invested across multiple tranches since then. (March 27, 2024)
BanyanTree, a domestic mid-market PE firm, to invest in Power Exchange India, a power trading platform promoted by National Commodities and Derivatives Exchange (NCDEX). The financial details of the transaction were not disclosed. (March 27, 2024)
[Exit] Chiratae Ventures, an India-focused technology venture capital fund, sold its stake in some of its portfolio companies in a bulk secondary deal to Madison India Capital, a domestic private investment firm, for c.$70 million. The fund sold its stakes in Lenskart, Bizongo, Rentomojo and others as part of the deal. (March 27, 2024)
[Exit] HealthQuad, a healthcare-focused venture capital fund, sold its entire stake in Asian Institute of Nephrology and Urology, a single-specialty hospital chain. The financial details of the transaction were not disclosed however the fund is expected to have generated over 4x MOIC on its investment in the company. (March 27, 2024)
[Exit] ChrysCapital sold its remaining c.3% stake in Mankind Pharma, a pharmaceutical and healthcare products company, for c.$300 million (c.3x MOIC in the latest transaction). (March 26, 2024)
Ambit Finvest, an NBFC arm of Ambit Group, is raising c.$83 million in a primary transaction from Daiwa Securities, a Japanese investment bank, and other existing investors. Daiwa to invest c.$50 million in the company. (March 26, 2024)
Avanse Financial Services, an education-focused NBFC, raised c.$120 million led by Mubadala and Avendus PE. (March 26, 2024)
Credit Deals and Issuances
India Cements, a manufacturer of primary building materials, is looking to raise c.$90 million through the issuance of bonds at c.15%. (March 28, 2024)
Punjab National Bank is looking to raise c.$1.2 billion through issuance of Basel III compliant bonds in FY2024-25. (March 28, 2024)
Indian Renewable Energy Development Agency (IREDA), is looking to raise c.$3 billion through bonds, perpetual debt instruments, term loans, commercial papers, and ECBs in FY 2024-25. (March 28, 2024)
ICICI Bank, Axis Bank, and IIFL jointly invested c.$95 million in GMR group-promoted Delhi International Airport through issuance of bonds at a c.10% coupon. (March 28, 2024)
Mohalla Tech, the parent company of ShareChat and Moj, domestic social networking platforms, raised c$49 million in debt from its existing investors which include Temasek, Lightspeed, HarbourVest, Moore Strategic, Rimco, and Alkeon. (March 27, 2024)
Indiabulls Housing Finance, a housing finance company, raised c.$350 million through overseas bonds at c.10% coupon. The bonds are labelled as social bonds and the proceeds from the same will be deployed towards home loans in the affordable housing segments and small-enterprises. (March 27, 2024)
Larsen & Toubro, an Indian multinational conglomerate, is looking to raise c.$900 million through ECB, term loans, and NCDs. (March 26, 2024)
KEY FUNDS AND FUNDRAISES
Alteria Capital, a domestic venture debt fund, marked the final close of its third venture debt fund at c.$185 million. (March 28, 2024)
Missed our latest Monthly Roundup (March 2024) for deals and fundraises?
MARKET INSIGHTS & RESEARCH
Reports
As per Avendus’ report on flex workspaces, India's real estate sector is experiencing disruption as flex workspaces gain popularity, projected to reach a $9 billion total addressable market by 2028. Following the pandemic, there's a shift toward tech-enabled, flexible workspaces over traditional offices, especially in IT and new-age sectors, with many large companies already adopting managed offices. The Indian CRE market is growing rapidly, likely to expand by c.50 million square feet annually, influenced by multi-national and domestic business growth.
CBRE report on ‘Decoding real estate through the spiritual tourism lens’ provides insights that the surge in spiritual tourism in India is driving a real estate transformation, marked by infrastructure upgrades and increased demand for retail and hospitality. This growth, spurred by government and private sector efforts, is providing varied investment opportunities and fueling economic recovery. The size of India’s faith-based tourism market is estimated to grow at a CAGR of 16.2% and touch c.$4.6 billion by 2033. Specialised properties catering to spiritual tourists, such as yoga retreats, meditation centres, and wellness facilities, present new investment and development opportunities in the real estate market.
Inc42’s report ‘How GenAI adoption is set to change the course of Indian healthcare’ outlines that in India, generative AI adoption in healthcare primarily involves chatbots, but startups are expanding its use, especially in conversational AI, to match global standards. Despite GenAI's early stage, experts foresee ongoing significant roles for human intervention in healthcare.
Project Syndicate’s paper ‘The Indian giant has arrived’ shows that as India's economy grows rapidly, becoming the world's fifth-largest with a population over 1.4 billion, it faces the challenge of managing its burgeoning global influence without repeating the missteps of countries like China and major tech companies. While India's per capita GDP remains much lower than high-income nations, its overall economic size positions it similarly to China in 2007, with purchasing-power-parity adjustments ranking it third globally.
KPMG’s report on ‘FDI in Indian space sector’ highlights that ISRO led India's space sector with limited private sector engagement, but the 'Indian Space Policy-2023' has opened doors for increased private participation, with in-space overseeing authorizations. As per the extant FDI Policy, FDI up to 100 per cent is permitted for satellites establishment and operation under the government route. The government is now easing FDI policies to further liberalize investment in various space-related activities.
EY's paper ‘India economic pulse’ provides insights that the global economy is set to grow at 3.1% in 2024, slower than the past average, while India surpasses expectations with 8.4% growth in Q3 FY24, driven by strong tax revenue and infrastructure investment. Despite global challenges, India's economy demonstrates resilience with robust domestic demand and high growth in the manufacturing and construction sectors.
ICRA’s note on EV industry in India highlights that India's new EV policy for 2024 is set to spur growth in the electric vehicle sector by attracting significant investments, creating jobs, and offering incentives to manufacturers, with specific localization and investment requirements for a better supply chain and EV ecosystem. The policy aims to fast-track EV adoption in passenger cars and establish India as a key player in the manufacturing of premium electric vehicles. Under the scheme, eligible companies establishing manufacturing plants in India can import completely built-up (CBUs) of e4w at a lower import duty of 15% for five years, subject to conditions.
Articles
The Indian Real Estate sector is experiencing a tech-driven revolution, making commercial and residential spaces more accessible to new investors through co-living and co-working models which offer premium office and quality residential spaces in a pay-as-you-use manner, attracting significant end-user investor interest from both institutional and retail investors. These segments utilize technology for efficient space management and improved tenant experiences, thus optimizing operational efficiency and investment returns. Read more.
Blackstone plans to allocate c.$25 billion towards expanding its private equity holdings in India over the next five years. The company intends to concentrate its investments in areas such as digital infrastructure, the transition to renewable energy, critical transportation sectors, industries focused on exports and electronic manufacturing within India. Read more.
Macquarie’s note highlights that India's economy is projected to grow rapidly in the coming years, driven by a young population (with median age of 28 years), rising disposable incomes, and increasing government investment (30% of nominal GDP) with a major focus on infrastructure. This growth is creating attractive investment opportunities in areas like renewable energy, digital infrastructure (India’s data usage to go up by 3x in next four years), and transportation, specifically in EVs. However, it is important for institutional investors to partner with experienced local teams. Read more.
KPIs
The Indian government plans to borrow $90+ billion, over 50% of its annual target, in the first half of FY25, a proportion lower than the usual due to expected reduced spending around the election period. [Paywall]
India's total gross government liabilities increased by c.2% qoq to c.$2 trillion by December 2023, with public debt constituting 90% of this figure, amidst fluctuating domestic bond yields influenced by crude oil prices, CPI data, and potential global bond index inclusion.
India's current account, which mirrors the gap between domestic savings and investments, has notably improved, dropping from a 4.8% GDP deficit in FY13 to an average annual deficit of 1.1% from FY14 to FY21. This improvement stems primarily from a fall in investment as a proportion of GDP, surpassing the decrease in domestic savings.
India's exports have reached an all-time high, navigating through global trade uncertainties with new bilateral and free trade agreements, especially targeting untapped markets in Africa, Latin America, and Central Asia. This surge includes a broad spectrum of products such as precious metals, automobiles, electronics, pharmaceuticals, and textiles
WEEKLY MARKET UPDATE (w/c March 25, 2024)
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