Providence eyes stake in media, entertainment companies

NEW DELHI: As part of its India strategy, Providence Equity Partners is looking to pick 10-15% stake in companies for a minimum investment of $50 million (Rs 200 crore).

While there are no country allocations, Providence is looking at long-term investment opportunities in India. Among the sub-sectors, Providence is interested in companies engaged in content creation for entertainment, telecom towers, media distribution business (either through cable network or through the satellite) and IT services.

Speaking to ET, Providence Equity Advisors India MD Biswajit Subramanian said: “We would like to have a meaningful say in the companies we invest. We would look at a minimum 10-15% stake in a company. We are also open to buy-outs.”

Globally, Providence looks at a minimum investment size of $250 million. However, this has been relaxed for India. According to Mr Subramanian, “India is at a different level of growth compared to the West. So, the least we would invest is $50 million.”

He expressed concerns about valuations in India which has kept the firm away from any deals. “The current market correction has brought down valuation in some sectors but we would wait for things to settle.”

The global private equity major that specialises in media, communications and IT sectors set up Indian operations last September. It has invested in Idea Cellular through a $400-million pre-IPO placement in October 2006.

Last year, the PE firm raised $12 billion, the largest by a sector-focused global fund. Globally, Providence has $21 billion of equity under management in firms such as MGM and Warner Music Group in the media & entertainment space apart from Kabel Deutschland, Europe’s largest cable operator. In the telecom sector, besides Idea Cellular in India, Providence is in the process of concluding the largest global leverage buyout, the $48.5 billion deal for Bell Canada.