In a dull deal year, a handful of PE players stood tall. This class of five PE investors struck more deals and pumped in more money than the others. According to deal statistics, the infrastructure bet has turned out to the safest investment theme in 2009 for these top PE players. The most profilic investor is International Finance Corporation, the private lending arm of the World Bank, clocking nine deals while the PE player with maximum money invested in 2009 is IDFC Project Equity.
IDFC Project Equity
Number of deals: 5
Deal Value: $230 million
IDFC Project Equity, which manages the Indian Infrastructure Fund with a corpus of Rs 3,800 crore, is a long-term equity investor in infrastructure assets. It typically invests in the project/SPV level for mega private sector projects in the country, where the infrastructure requirement for funds over the next 10 years tops $1 trillion by various estimates. IDFC Project Equity’s 2009 investments are skewed in favour of energy and highways, easily two sectors where there is a maturity in terms of private sector participation. In its largest deal, IDFC Project Equity announced its investment of Rs 350 crore in Essar Power to part-fund the equity for its ongoing projects. It has invested Rs 250 crore in alloy steel producer Adhunik Metaliks Ltd’s power subsidiary Adhunik Power and Natural Resources Ltd, which is setting up a Rs 2,650-crore power plant.
Along with IDFC, the project equity arm has contributed to the equity portion of GMR’s Kamalanga Energy SPV. In the highway sector, it has made investments into Sabarmati Gas Ltd ($16 million) and Ashoka Highways ($50 million). Project equity investments in infrastructure are characterised by low risks and stable predictable returns. IDFC Project Equity is addressing a market of small and medium private enterprises who are chasing numerous infrastructure project opportunities and need risk capital for a long term horizon.
Norwest Venture Partners India
Number of deals: 4
Deal Value: $100 million
Norwest Venture Partners India, which invests in agriculture, retail, infrastructure, manufacturing, education, technology, and consumer-driven sectors, has, in the last year, shown a clear bias
towards growth and late stage investments in the country. The Silicon Valley-headquartered firm Norwest has invested over $100 million across four deals including Rs 250 crore in National Stock Exchange, Rs 80-85 crore in value added services firm OnMobile and Rs 20 crore in infrastructure management services firm Appnomic Systems and Rs 121 crore in Shriram City Union Finance, its first deal in the financial services space. Norwest bought into Shriram City Union Finance in a secondary sale by picking up the stake of a Merrill Lynch subsidiary via open market.
New Enterprise Associates
Number of deals: 3
Deal Value: $80 million
The Silicon Valley-headquartered fund raised a $2.5-billion global fund in 2009. In India, the firm invested $13.48 million in reverse logistics player RT Outsourcing, $6 million in ValueFirst Messaging, a mobile messaging service provider, and $60 million in Financial Software and Services Ltd (along with another investor Jacob Ballas Capital).
NEA has a portfolio of half a dozen companies including Sasken, Novatium and ISGN Technologies. After appointing former ICICI Venture pro Bala Deshpande, the firm has also shored up its India team. NEA also has an affiliation to another Indian fund, NEA-Indo US Ventures, a $189-million venture capital fund.
International Finance Corporation
Number of deals: 9
Deal value: $74 million
The private investment arm of the World Bank turned out to be the most prolific investor in 2009 with a focus on deals in the financial inclusion. Out of its nine new deals this year, four were in the financial inclusion space. International Financial Corporation (IFC) invested over $10 million in microfinance institutions like AU Financiers India Pvt. Ltd, Belstar Investment & Finance Pvt. Ltd and Utkarsh Microfinance. It also participated in follow-on round of FINO, a technology provider to MFIs. Its largest investment was $30 million in healthcare to insurance group Max India. Other investments this year were VicatSagar Cement, Azure Power, Snowman Frozen Foods and Jain Irrigation Systems.
Standard Chartered Private Equity
Number of deals: 3
Deal Value: $57 million
2009 turned out be a busy year for the private equity arm of Asia-focused Standard Chartered Bank. The PE firm closed its biggest deal towards the end of the year by putting $33 million in Firepro Systems Pvt Ltd, a Bangalore-based building safety and security solutions provider. Its other deals this year were $10 million in PI Industries Ltd, an agri-input and fine chemicals company and $13 million in construction firm Man Infraconstructions, which has since filed for a listing.
Beside closing new deals, Standard Chartered Private Equity (SCPE) also hiked its stake in vehicle finance firm Mahindra & Mahindra Financial Services, in which it first invested in 2008. It also earned some quick bucks by taking stakes in banks like Karur Vysya Bank Ltd and Indian Overseas Bank in February from open markets and selling since the rally started.