The private equity sector in India, which saw deals drying up owing to the global slowdown last year, seems to have started 2010 with renewed hope with investments from new entrants. Aditya Birla PE Fund I has closed its debut deal last week by investing Rs 50 crore in Anupam Industries. TA Associates, a leading PE firm that handles $16-billion capital, closed its debut deal in India by investing in Micromax Informatics. Similarly, Bain Capital made its debut investment in India, pumping in $54 million in Himadri Chemicals.
According to Bharat Banka, managing director & CEO, Aditya Birla Capital Advisors Private Ltd (ABCAP), the confidence in the Indian PE space for the next two years is better compared to recent past. He said, ?The earnings growth in the portfolio companies becomes predictable nowadays as compared to the last two years and hence, the confidence of the PE players in the future growth of their portfolio companies is getting better.? After all, the Indian economy is stabilising, he added.
ABCAP made the first closure of Fund I at Rs 675 crore last month.
Bain Capital, after acquiring a 15.39% in Himadri Chemicals with an investment of Rs 252 crore ($54 million), will make a public offer for buying another 20% stake with another $70 million or Rs 328 crore. So, the overall investment stands at $124 million. Bain Capital manages $65 billion in assets globally. Amit Chandra, managing director, Bain Capital Advisors (India), said, ?Though we have opened our Indian office about 18 months back, we had to wait for a deal due to the global economic crisis. The deal environment was slow last year. The market opened up 4-5 months back and that helped us close a good deal with Himadri Chemicals.? Amit Chandra, former partner of New Silk Partners, joined Bain Capital in 2008.
Though TA Associates had acquired a minority stake in Idea Cellular in 2006 through its London office, the $45-million investment in domestic handset maker Micromax Informatics was its first one after setting up office in Mumbai last year. Naveen Wadhera, director & country head, India, TA Associates, could not be reached for comments.
In its debut deal, the leverage buyout specialist Apollo Management picked up 11% stake in Dish TV for $100 million in November 2009. New York-based Apollo Management, which has assets in excess of $50 billion under management, opened an office in India in 2008.
According to a report by global consultancy firm Grant Thornton, 206 PE deals were closed in 2009 with a total announced value of $3.44 billion (Rs 15,953 crore), a decline of 68% from 2008 when 312 deals worth $10.59 billion were announced.