Investing in public markets has been a strategy adopted by many private equity investors and it has delivered good results for a few of them as well. Considering the steep valuations in the private markets and too much capital chasing a few good companies, a public market strategy is emerging as a more preferred option for PE investors. This explains why TA Associates, one of the oldest private equity firms in the USA which started investing in India five years ago, is now spending more time in public markets.
In an exclusive video interview with VCCircle, Naveen Wadehra, country head of TA Associates, discusses its India strategy going forward and why it makes sense in the current environment. Wadehra asserts that the firm believes in "profitable growth investing" and is very bullish as far as India is concerned, which is one of the key markets.
TA Associates has invested under $400 million in India till now. Its average ticket size in India has been between $45 million and $125 million. The Boston-headquartered private equity firm, which manages more than $16 billion in capital globally, has been operating in a mid-market deal-making space just as the majority of the private equity firms do here. Incidentally, business services, financial services, healthcare and consumer will be the key focus areas for TA Associates in India. After investing over $100 million in 2006 in a pre-IPO deal in Idea Cellular, the firm had been relatively silent for a span of three years. But after the three-year hiatus, the firm wrote its first big cheque in 2009 when it backed Indian cellular phone maker Micromax with $45 million funding. Last year, the PE firm bought stake in the diagnostics chain Dr Lal PathLabs in a secondary deal from Sequoia Capital. It has recently struck its fourth deal in India – putting $40 million for an undisclosed stake in privately owned Tega Industries, a maker of consumables for the mining industry. Play the video to watch the interview.