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Recap 2013: Most active PE investors

31 December, 2013

IFC continued to hold the flagpole as the most active private equity investor in India in terms of volumes while Qatar Foundation Endowment was the largest investor in terms of value. Several other players, who also figured in VCCircle’s 2012 list of the most active PE investors, also maintained their appetite for pouring money into India, including GIC Singapore (both in value and volume), IDFC Alternatives and Blackstone.

Among the most active dealmakers by volume, four investors were tied at the second spot. Here is a look at the listing.

Most Active PE Investors (by value)

Qatar Foundation Endowment: $1.26 billion

In its debut deal in the country Qatar Foundation Endowment has become the single-largest investor in the country when it the struck the biggest deal of the year. Bharti Airtel, the world’s fourth-biggest cellular carrier by customers, raised $1.26 billion (Rs 6,796 crore) from Qatar Foundation Endowment by selling 5 per cent stake through a fresh issue of shares.

Qatar Foundation Endowment, which has a mandate to make direct and managed investments, was formed to provide sustainable income stream to fund Qatar Foundation’s operations in perpetuity. It is separate from Qatar Investment Authority, the country’s sovereign wealth fund.

KKR & Co: $760 million

Year 2013 was one of the busiest years for KKR & Co as it closed two big private equity deals and one structured transaction. The PE major started the year with a bang, acquiring a controlling stake in Alliance Tire Group (ATG) from Warburg Pincus in a leveraged buyout with an equity valuation of $522 million.

It followed it up by picking a large minority stake in Gland Pharma Ltd, a pure-play generic injectable pharmaceutical products company, for $200 million, in what would be the biggest PE deal as yet in the Indian healthcare sector.

KKR also invested $90 million in investment entities owned by promoters of India’s largest healthcare services company Apollo Hospitals Enterprise Ltd. The investment is in the form of a five-year callable security which could give KKR a minority stake in the listed group flagship.

Baring PE Asia: $676 million

Baring PE Asia closed two mega-deals this year. During 2009-2012, it closed only two investments—engineering company Coastal Projects and a PIPE investment in private sector lender South Indian Bank.

But the firm turned bullish on India this year, closing some of the most sought after deals. In what was one of the largest buyout transactions in the Indian information technology space, Baring Private Equity Asia acquired 71 per cent stake in Hexaware Technologies Ltd for $430 million.

Baring PE Asia also picked up 14 per cent stake in the India unit of the French cement maker Lafarge SA for $260 million, the largest private equity investment in India’s cement sector.

Earlier this year, Baring PE Asia hired former Goldman Sachs managing director Bala Naidu to look after India investment along with Jimmy Mahtani, the longstanding India head at the PE firm.

GIC Singapore: Over $650 million

GIC, the sovereign wealth fund of Singapore, has been one of the most aggressive investors in India, especially after opening a local office in 2011. In 2013, the firm has been making contrarian bets on sectors like power and real estate, which have been out of favour of the broader investment market.

GIC picked up shares worth Rs 1,000 crore ($180 million) in state-owned power generator NTPC Ltd at the start of the year. This deal was soon followed by $150 million in an arm of London-listed Greenko Group plc, one of India’s largest independent power producers in the renewable energy space.

But its favoured sector over last year has been India’s real estate. It partnered with Blackstone Real Estate Partners to acquire an IT park in Bangalore and also tied up with private equity major KKR & Co to set up a realty-focused NBFC besides tying up with Singapore’s developer-investor Ascendas to invest S$600 million (Rs 3,000 crore) in Indian property.

GIC also picked up 2.6 per cent stake in private sector lender Kotak Mahindra Bank for Rs 1,296 crore or $239 million, in what would be its single-largest deal during the year.

Apax Partners: $420 million

Private equity major Apax Partners closed its second deal in the Indian IT space by acquiring GlobalLogic, an offshore software R&D services provider. The acquisition was routed through ODSA Topco Ltd, a company backed by Apax Partners, for $420 million.

The transaction is also the third investment by Apax Partners, which has been selective in India, and its first buyout deal. It invested in India’s largest healthcare chain Apollo in 2007 and exited with three-fold returns. In early 2011, Apax Partners invested over $350 million in Nasdaq-listed information technology firm iGate to back its acquisition of Patni Computers.

Most Active PE Investors (by volume)

International Finance Corporation – 11 deals

The private investment arm of the World Bank Group continues to be the most prolific investor in India, with investments ranging from renewable energy to financial services to manufacturing. IFC closed around a dozen new deals in 2013 worth $209 million besides its fund-of-funds operations where it invests in private equity funds as a limited partner.

Around $100 million or almost half of the total went to Malvinder and Shivinder Singh-controlled public listed healthcare services firm Fortis, which would be one of its single-largest bets in India till date. It continued to expand its financial services portfolio, investing in Kolhapur-based lender Ratnakar Bank and Chennai-based Utkarsh Micro Finance. It also invested in renewable energy firms like NSL and Himtal Hydropower Company, besides low-cost housing development firm Value and Budget Housing Corporation.

GIC Singapore – 5

The larger of the two sovereign wealth funds of Singapore (the other being Temasek), has been one of the most aggressive investors in India, especially after opening a local office in the country two years ago. This year it didn’t just bring a pot load of money but also struck close to half a dozen deals. See above for more details on its investments.

Norwest Venture Partners – 5

Multi-stage investor Norwest Venture Partners had a busy year, closing five new investments. The Silicon Valley based investor increased its exposure to the Indian banking sector, making its fourth investment in the sector. Norwest picked up a stake in private sector lender ING Vysya Bank Ltd through the markets during the year.

Earlier in 2013 Norwest invested in non-banking finance company Cholamandalam Investment & Finance, which is part of the Murugappa Group. In April 2013, it part exited Shriram City with nearly 4x returns on its four-year-old investment.

Norwest also picked up 14 per cent stake in the cold chain services firm Snowman Logistics Ltd for Rs 60 crore ($10.4 million) through a fresh issue of shares and invested in Nueclear Healthcare, a radiology diagnostics company started by Thyrocare founder A Velumani.

IDFC Alternatives – 5

The private investment arm of infrastructure financier IDFC had a busy year, making investments across assets like private equity, infrastructure and real estate. Its infrastructure fund made a first close $644 million, on its way to raise $1 billion.

IDFC’s private equity unit invested in Bangalore-based healthcare services provider Medi Assist and India’s largest agri-commodity derivatives exchange National Commodity & Derivatives Exchange Ltd (NCDEX). Its realty arm bought assets worth Rs 250 crore in Pune’s real estate developer Paranjape Schemes (Construction) Ltd’s Hinjewadi special economic zone (SEZ).

IDFC’s infrastructure fund bought 74 per cent stake in GMR Ulundurpet Expressways, which operates highway stretch of about 73 kms from Tindivanam to Ulundurpet in Tamil Nadu. It also invested $35 million in United Liner Agencies of India, engaged in providing shipping facilities.

IIFL– 5

IIFL Real Estate Fund (Domestic Series I), the maiden realty fund of India Infoline with a corpus of around Rs 700 crore, has been a fairly active investor, with average investments ranging between Rs 30 crore and Rs 75 crore.

The fund invested in Mumbai-based developer Wadhwa Group’s Chembur project; Rs 110 crore in Shipra Group for its residential project in Ghaziabad and two residential projects in Bangalore.

(Edited by Joby Puthuparampil Johnson)


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Recap 2013: Most active PE investors

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