India the New Hot Spot for Global Private Equity

By Vipin Agnihotri

Thanks to increasing consumer market and economic boom in India, the action in private equity space is increasing with every passing day. Therefore, I was not at all surprised when one of my colleagues said to me that private equity funds are queuing up to enter India (By the way, another source for private equity news that we subscribe to is the VC Circle).

Point to be noted here is that Blackstone India and Apax Partners, which started investing in India this year, already have full-fledged offices here. Same is the case with Baird Private Equity and Lehman Brothers. What’s more, Deloitte Touche Tohmatsu India has also set up a dedicated private equity practice called Deloitte Corporate Finance Services India.

According to sources, two more big names from the Private Equity scene, both having expertise in leveraged buyouts, namely Kohlberg Kravis Roberts & Co and Cerebrus Capital are setting up shop in India even though buyouts are not that famous in Indian market.

In my opinion, majority of these top buyout funds are at this moment of time not operating the way they do in the western markets. If experts are to be believed, their modus operandi is different in India. It is worth mentioning in this regard that leveraged buyouts are still not happening in India. As a matter of fact, in India funds are investing largely to build companies.

In addition, another hitch in the Indian market is that the skill sets required for leveraged buyout are not easily available. Taking this into account, foreign players like Blackstone India and Apax Partners make do with extremely lean teams in India. Whatever be the case, one thing is for sure that the potential is there of buyouts and players are bullish.

All in all, as the Indian market matures, these funds with deep pockets can create a market for their core business. But for the time being, they are just casing out the joint and waiting for bigger opportunities.

The India Street has information that Cerberus Capital Management Chairman John W Snow will come to India in December as a precursor to a direct presence.

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