India In Sight #48
India In Sight #48
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.
Subscribe to receive the newsletter every week in your inbox!
Stay tuned, Stay ahead!
Key reports in this edition:
India Private Equity report 2024 by Bain
India Abroad: Navigating the global landscape of overseas investments by EY
Sector notes on power, investments and climate transition by ICRA
KEY DEALS
Equity
Meesho, a social e-commerce and online shopping platform, raised c.$275 million in its latest funding round, part of an ongoing $600 million larger round. The investors include existing investors like SoftBank, Prosus, Elevation Capital and Peak XV Partners. (May 11, 2024)
[Exit] Blackstone to sell a part of its stake in Aadhar Housing Finance, a housing finance company, in its upcoming IPO for c.$240 million. Blackstone initially invested in the company in 2019 through a mix of primary and secondary transactions for c.$430 million (translating to c.4x MOIC over 5 years). (May 10, 2024)
Venturi Partners, a Singapore-based PE firm, acquired c.5% stake in K12 Techno Services, an education service provider and school operator, for c.$27 million. (May 09, 2024)
Atlan, an active metadata platform, raised c.$105 million in a round led by GIC and Meritech Capital at a valuation of c.$750 million. (May 08, 2024)
GEF Capital, a global investment firm, acquired a stake in TI Clean Mobility, an electric mobility solutions company, for c.$70 million. (May 07, 2024)
Quadria Capital, a domestic healthcare focused PE firm, acquired a significant minority stake in NephroPlus, a dialysis service provider, for c.$102 million. (May 06, 2024)
KKR acquired Healthium Medtech (f.k.a. Sutures India), a medical devices maker, for an estimated c.$840 million, from Apax Partners. The exact financial details of the transaction were not disclosed. (May 06, 2024)
State Bank of India invested c.$85 million in TCG Urban Infrastructure, a US based diversified conglomerate, for the development of the World Trade Centre project in Gurugram. (May 06, 2024)
[Expected] EQT, a global PE firm, is looking to sell its stake in Sagility (f.k.a. Hinduja Global Healthcare), a tech-enabled healthcare business process management company, via an IPO process at an expected valuation of c.$3 billion with EQT looking to harvest c.$500 million in the process. BPEA (EQT) initially acquired the company in 2021 for c.$1.2 billion, financing it with c.$755 million debt. The exact financial details were not disclosed. (May 10, 2024)
[Expected] India Resurgence Fund, a JV between Piramal Enterprises and Bain, is looking to acquire a stake in Anthea Aromatics (backed by ICICI Ventures), a specialty chemicals manufacturer, for an expected c.$130 million through a combination of primary and secondary investments. ICICI Ventures initially invested in the company in 2016 and plans to sell its entire stake to IndiaRF. (May 10, 2024)
[Expected] TVS Holdings (f.k.a Sundaram-Clayton) and Premji Invest, the family office of Azim Premji (ex-Wipro Head), to acquire c.80% and c.20% stake respectively in Home Credit India Finance, a consumer durable loan company, for a combined value of c.$85 million. (May 10, 2024)
[Expected] Home First Finance Company, a domestic housing finance company, is looking to raise c.$75 million through its maiden external fundraise from US DFC. (May 10, 2024)
[Expected] ChrysCapital is looking to sell its stake in GeBBS Healthcare, a technology-enabled provider of revenue cycle management solutions, for an estimated valuation of c.$1 billion. ChrysCapital initially acquired a stake in the company in 2018 for c.$740 million. (May 08, 2024)
[Expected] Blackstone is looking to acquire Inspire BKC, a commercial real estate project owned by Adani Realty with 800K sq. ft. area, for an estimated $240 million. (May 07, 2024)
Credit Deals and Issuances
Muthoot Finance raised c.$650 million through US dollar-denominated bonds at a coupon rate of c.7%. (May 09, 2024)
Bajaj Group raised c.$1.4 billion through the issuance of bonds for two of its group companies. Bajaj Housing Finance raised c.$540 million through the issuance of NCDs at c.8% rate while Bajaj Finance raised c.$915 million through long term bonds at c.8%. (May 08, 2024)
KEY FUNDS AND FUNDRAISES
TPG raised c.$7.8 billion for its Asia-focused private equity and real estate funds. TPG's eighth Asia-focused private equity fund secured c.$5.3 billion, making it the firm's largest Asia fund in three decades, while its two real estate funds secured c.$2.5 billion. (May 09, 2024)
Client Associates, a wealth management and investment banking firm, marked the first close of its maiden category II AIF at c.$35 million. The fund has a target corpus of c.$60 million and will look to invest in high-growth companies in India’s consumer and financial services sectors. (May 07, 2024)
MARKET INSIGHTS & RESEARCH
Reports
Bain’s India Private Equity report 2024 highlights that in 2023, Indian PE/VC activities dropped to c.$39 billion, down 35% vs 2022, reverting to pre-pandemic levels. This decline was primarily due to a substantial reduction in venture capital investments (down 60%), influenced by global economic challenges and weakened investor confidence. PE investments remained resilient, declining by a moderate 20% as large-scale dealmaking persisted for high-quality assets. Traditional sectors like healthcare and advanced manufacturing saw strong investment flows due to robust operating models and supportive policies. Despite the slowdown in dealmaking, exit value soared by 15% to c.$29 billion, with exit volumes rising from from c.210 to c.340 exits, highlighting India's growing prominence in the Asia-Pacific PE-VC landscape. Read more.
EY’s report ‘India Abroad: Navigating the global landscape of overseas investments’ discusses some of the regulatory and tax issues that investors should consider while investing overseas. Over the last few years, there have been multiple policy changes that can be leveraged upon as businesses invest overseas, such as routing investments through the GIFT City and leveraging on its liberal exchange control regulations and progressive tax regime; new ODI policy of the RBI; and increase in investment limits for public sector companies. All these changes provide businesses with more flexibility in planning their overseas investments.
Morgan Stanley’s note on What could keep India’s bull market going? provides insights that India's stock market is on the brink of its longest bull run due to increased domestic investments and a growth trajectory that could see its economy become the world's third-largest by 2027. Despite the market having already priced in election outcomes, overlooked factors such as a burgeoning domestic equity investment, improved social equity, and technological advancements could propel earnings growth by 20% annually over the next five years. The upcoming election results and the potential for sustained government policies are pivotal for maintaining this growth momentum.
Sector notes from ICRA:
Power: The growth in electricity demand improved to 9.4% in the first 28 days of April 2024 from 9.2% in March 2024, led by a favourable base.
Investments: Investment activity remained robust in Q4 FY2024 driven by state level investor meets; momentum likely to improve in H2 FY2025, after elections and the monsoon season. Housing sales scaled to all-time high level in Q4 FY2024.
Climate: The share of non-fossil, fuel-based installed capacity in the overall installed capacity expected to rise to 59% in FY2030 from 45% in FY2023. India would need an estimated $150 billion of investments till 2030 along with over $70 billion towards transmission infrastructure and storage capabilities.
Articles
India's IT services sector is actively engaging in M&A, with numerous small to midsize firms making strategic acquisitions in various tech segments to boost their capabilities in anticipation of a rebound in tech spending. Major firms like Infosys and Wipro are also participating but at a lower frequency compared to smaller competitors. Recently, Hexaware and Quest Global, both backed by Carlyle Group, announced significant acquisitions, highlighting this trend. Read more.
In the realm of private equity, artificial intelligence (AI) is recognized for its groundbreaking potential. Initially, Goldman Sachs projected global AI investments to reach $200 billion by 2025, which could now be a low estimate. The growing enthusiasm for AI is expanding its impact beyond the core technology to include related sectors such as semiconductors, servers, storage solutions, networking, and data management and analytics. Read more.
Investors are focusing on increasing their investments in startups they've previously invested in vs making fresh bets, resulting in fewer new unicorns. This trend has led to only two startups, Perfios and Bhavish Aggarwal’s Krutrim AI, reaching unicorn status in 2024, matching the count from 2023. Read more.
By 2026, India is projected to become the third largest consumer market, overtaking Germany and Japan, as per UBS. UBS also forecasts a doubling of the affluent population, reaching 88 million people with over $10,000 in annual income by 2028. However, consumption growth is expected to be subdued at 4-5% annually for the next few years, below the previous decade's average of 6.5-7%. Read more.
In the last fiscal year, India saw a notable shift in private consumption patterns, with transport, health, and education accounting for 27% of total expenditure—the highest since FY12. Transport alone made up 17% of private consumption, highlighted by vehicle purchases hitting an 11-year peak in FY23, reflecting the country's move towards higher per capita income and an increasing share of services in consumption. Read more.
KPIs
Households' net financial savings in India dropped to a five-decade low of 5.3% of GDP in FY23, down by 7.3% vs the previous year, according to national accounts statistics. This decrease was attributed to an increase in household borrowings, as noted by economists when initial data was released in September 2023.
RBI is projected to transfer c.$12 billion to the government in FY25, according to a Union Bank of India report. This amount represents an increase from the $10.5 billion transferred in the previous year, with expectations of a strong dividend payout possibly exceeding forecasts due to factors like interest earnings.
In 2022, India set a global record by receiving over $111 billion in remittances, the highest worldwide and the first ever to exceed the $100 billion threshold, according to the UN migration agency. The International Organisation for Migration highlighted in its World Migration Report 2024 that India led the list of top remittance recipients, which also included Mexico, China, the Philippines, and France. This trend underscores the significant impact of labor migration from Southern Asia, with India, Pakistan, and Bangladesh all ranking among the top ten remittance-receiving countries globally.
WEEKLY MARKET UPDATE (w/c May 06, 2024)
Thank you for reading India In Sight!
Read our other editions here.
Disclaimer:
The content provided on this platform contains references and links to external sources, including articles, reports, websites, images, or videos. We do not own or claim copyright over the content found in these external sources. The ownership and rights of the content belong to the original creators.
This post and the information presented are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and affiliated persons and companies assume no liability for this information and no obligation to update the information or analysis contained herein in the future.