Hedge Funds Offering India Companies to Private Equity, 3i Says
Tuesday, March 3, 2009 : PermalinkBloomberg – Private-equity investors are being offered stakes in Indian companies as hedge funds and banks seek to offload assets, said an executive at 3i Group Plc.
Hedge funds and banks that bought minority stakes in Indian firms in recent years are finding it hard to unwind their investments because the “listed market is dead,” said Anil Ahuja, who heads the Asian business of the London-based private- equity firm. 3i has poured more than $2 billion into Asia since 2006, and last month invested $161 million in Krishnapatnam Port Company Ltd., its third infrastructure investment in the nation.
“There’s a whole new slew of transactions that are starting to be discussed where people who need the capital are offloading stakes which they hold in unlisted companies,” he said, declining to name the companies.
The offers could ease a slowdown in private-equity sales as stakes are offloaded for less than what management of the companies are prepared to accept, Ahuja said. Private-equity investments in India may fall to as low as $5 billion this year, according to estimates by TPG Inc. and Bain Capital executives at an industry conference in Mumbai last month. That would be less than half the $10.7 billion invested in 2008, based on estimates from the Asian Venture Capital Journal.
Initial share sales by Indian companies fell 46 percent to 183 billion rupees ($3.5 billion) in 2008, making it harder for private-equity investors, banks and hedge funds to cash out their investments. The benchmark Sensitive Index tumbled a record 52 percent last year.
Tags: 3i group plc, ahuja, asian business, asian venture capital journal, bain capital, capital-journal, company ltd, infrastructure investment, initial share, listed market, minority stakes, private equity firm, private equity investments, private-equity-investors, rupees, sensitive index, share sales, tpg inc, venture-capital-journal
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