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KKR To Look Beyond Buyouts In India; Eyes Debt, Minority Deals

07 January, 2011

After a busy 2010, alternative asset management major Kohlberg Kravis Roberts & Co (KKR) is looking to bring more services in India even as it expands its private equity and fixed income practices. The firm could also look at bring businesses like capital markets advisory to India, KKR co-founder Henry Kravis said in an interview with Mint.

“We are far more multi-asseted in India today rather than others. It’s more like the US model, where we are able to give debt, equity and mezzanine solutions to our clients,” said Kravis in the interview. He added that the firm may look to bring its capital markets raising business here over time. KKR has underwritten IPOs like Dollar General Corp, a discount retailer, and Avago Technologies Ltd in the US.

“India is a very important part of our future. We are going to have dedicated people in our operating and consulting group that will be on the ground in India and working with the Indian companies,” said Kravis, who reportedly visits India three times a year.

The KKR co-founder said that his firm will continue the partnership model in India, where it takes a minority stake in family owned businesses. “We will do minority investments in India. We bought one company (Aricent) in India and that was a fluke that we were able to buy it as it was owned by an American company,” Kravis said. “But family-owned companies are not for sale and why should they necessarily be? What they do need is a partnership approach to improving their business,” he added.

In 2010, KKR has done a mix of fixed income and equity deals in India. It took equity stakes in the demerged cement unit of Dalmia Cement (Bharat) Ltd and also invested $200 million with a consortium in Coffee Day Holdings. It has made debt investments in Sajjan Jindal Group and Avantha Power. It completed the investment in Bharti Infratel and the leveraged buyout of Aricent before opening office in India in 2008.

Kravis feels that India should open up sectors like banks and insurance. He also feels that the Indian corporate debt market still has to take off.

Kravis added that fundraising market continues to be tough and fund sizes will be smaller as there is still dry powder in the market. “…terms are more stringent than before. We feel it and we see it when we go out and talk to investors,” said Kravis.


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KKR To Look Beyond Buyouts In India; Eyes Debt, Minority Deals

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