Mumbai: Singapore-based private equity firm Growtheum Capital Partners is set to officially open its office in Mumbai this July, joining the expanding roster of PE investors in India. At the same time, US PE firm Platinum Equity is exploring investments in a range of sectors including healthcare, technology, and infrastructure to mark its debut in the Indian market.
Growtheum will start operations with a 4-5-member team focusing on consumer and healthcare with added differentiation of potentially expanding businesses to Southeast Asia. It has set a minimum cheque size of Rs 350 crore.
"Companies are growing well at a decent multiple of GDP. Promoters and management teams have become much more organised and demonstrate better corporate governance compared to a decade ago," said managing partner Amit Kunal. Kunal was earlier managing director and head of the direct investment group, Southeast Asia at GIC, spearheading PE investments in the region.
Jacob Kotzubei, co-president of Platinum Equity and a member of its investment committee said, "While we have not previously acquired any companies headquartered in India, we have extensive operational experience in the region."
Many of the 50+ companies in our global portfolio have a substantial presence in India," he said in an email response to queries.Platinum Equity with over $48 billion of assets under management invests in businesses with enterprise values ranging from $100 million to $10 billion.
The moves by Growtheum and Platinum Equity underscore a broader trend of sharpening PE focus on the Indian market. In the past two years, many global firms have either expanded, set up operations or doubled down allocation in the region, driven by strong fundamentals of companies and the market's growth potential. Firms such as as Vitruvian Partners and Permira have expanded or set up operations in India in recent years.
Kotzubei highlighted the maturity of India's buyout market, noting the increase in control opportunities that align with Platinum Equity's strategy. "There are more founder or family-owned businesses in India facing succession or other issues that need a partner who can not only provide capital but also operational expertise. They are looking to create additional value while also protecting their legacy and setting up their business for a new stage of growth. We have a lot of experience in those situations," he said.
Kunal at Growtheum said the three-year-old fund, which raised a corpus of $567 million (about Rs 4,700 crore), is approaching India with "cautious optimism".So far, the fund has made several strategic investments in Southeast Asia including four in Indonesia and one in Vietnam. However, Kunal noted some challenges such as market exuberance, which can result in expected returns not matching the risks involved. "It is important for us to find deals at a fair valuation," he said.
Despite the market excitement, companies are often willing to accept a slight discount on valuation if they perceive value addition from investors.
While Platinum is currently not looking to set up an India office, the Singapore office will take the lead in evaluating investment opportunities in the country. Last September, the firm appointed Amit Sobti from Ontario Teachers' Pension Plan to lead the Asia deal execution team from Singapore.
Platinum expects its "unique M&A&O (mergers, acquisitions, and operations) strategy", integrating investment expertise with deep operational capabilities to differentiate itself in the market, Kotzubei said.Prabhav Kashyap, a partner at Bain & Company, said healthcare, particularly on the provider and pharma sides, manufacturing - both electronics and packaging - as well as IT services will attract PE investment.
"A lot of global GPs are discussing increased India allocations within Asia-Pacific or global funds. There are plenty of interesting opportunities in domestic businesses fuelled by the consumption story, as well as the broader theme of 'India for the World'," Kashyap added.
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