Citigroup PE marks $1.8 bn for India investment in 2008
CVC International, the private equity arm of Citigroup, which invested more than a billion dollars in the country in 2007, is planning to up the ante.
By Shishir Prasad, TNN |
MUMBAI: The PE flood is in full spate. If the last year set a record of sorts at $17 billion of inflows, then this year might reset all the records once more. CVC International, the private equity arm of Citigroup, which invested more than a billion dollars in the country in 2007, is planning to up the ante. “We should be able to invest at least $1.8 billion in 2008,” says CVC International MD Ajay Relan, who also heads India operations.
PE conjures up images of ruthless leveraged buyouts that are giving to rise to regulatory concerns worldwide. “The reality is that Indian PE is totally different, said PR Srinivasan, who has just been made MD at CVCI. “The LBO approach works in the West where business growth rates are marginal and private equity returns come from financial engineering and restructuring (restructuring is another word for “job losses”). “In India PE is about growth and job creation. When we invested in Suzlon four years ago, the business employed 950. Today, the company employs more than 10,000 in India and 12,000 worldwide,” said Srinivasan.
In many ways, the growth of CVCI’s investment appetite is also the story of how Indian entrepreneurs have increased the scale of their operations. A few years ago entrepreneurs were not thinking big enough and it was the big funds that were wasting time trying to convince entrepreneurs to dream up of ambitious plans. “We were a small investor in that era” said Srinivasan “we have grown with the Indian entrepreneur”. And grow they certainly did. . In 2007, CVC did three deals that were all more than 100 million in size: Keane (IT service), Sharekhan (retail broking) and JBF Global (textiles).
PE conjures up images of ruthless leveraged buyouts that are giving to rise to regulatory concerns worldwide. “The reality is that Indian PE is totally different, said PR Srinivasan, who has just been made MD at CVCI. “The LBO approach works in the West where business growth rates are marginal and private equity returns come from financial engineering and restructuring (restructuring is another word for “job losses”). “In India PE is about growth and job creation. When we invested in Suzlon four years ago, the business employed 950. Today, the company employs more than 10,000 in India and 12,000 worldwide,” said Srinivasan.
In many ways, the growth of CVCI’s investment appetite is also the story of how Indian entrepreneurs have increased the scale of their operations. A few years ago entrepreneurs were not thinking big enough and it was the big funds that were wasting time trying to convince entrepreneurs to dream up of ambitious plans. “We were a small investor in that era” said Srinivasan “we have grown with the Indian entrepreneur”. And grow they certainly did. . In 2007, CVC did three deals that were all more than 100 million in size: Keane (IT service), Sharekhan (retail broking) and JBF Global (textiles).
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