3i India, the indian arm of private equity fund 3i, is planning to invest $50-60 million (about Rs 300 crore) in various sectors this year.
“We would ideally like to put in $100-150 million (up to Rs 750 crore) this year but $50-60 million should materialise,” said Mahesh Chhabria, Partner at 3i India.
The investment would be made across sectors like retail and distribution companies, logistics, back-end retail, education, water and waste management. The average deal size would be in the range of $30-35 million. The private equity fund would invest the money out of its growth fund.
It has an infrastructure fund, India Infrastructure Fund, with a corpus of $1.2 billion (about Rs 6,000 crore) in association with India Infrastructure Finance Company. The fund has already deployed $500 million across road and port projects.
3i's India portfolio is valued at $920 million. Its portfolio includes companies such as OOH Media, Vijai Electricals, Nimbus Communications, International Tractors, UFO Moviez and International Cars & Motors. The fund looks to acquire minority stakes in companies out of its growth capital fund.
It recently offloaded 80 per cent of its stake in Mundra Port and Special Economic Zone for Rs165.33 crore through the open market. It continues to hold 0.36 per cent stake in the firm.
According to sources, 3i India would look at exiting some of its investments in companies such as Nimbus Communications and ITL through IPO route in 2010.
"The deal pipeline has revived. I see lot of deals getting completed and announced in the later part of this year -- post the July- August period. More money will be put in to work next year. There is still a gap between valuations in public and private markets," added Chhabria.
The 3i group in March announced its results wherein its net asset value more than halved and the company reported a record £2.2 billion loss. The UK-based firm is coming up with an underwritten rights issue to raise £700 million ($1.05 billion) and reduce the company's debt.
3i's total assets under management have slipped to £8.02 billion from £9.79 billion in the previous year.
It has recently set up a buyout team in India under Saurabh Shah, which will focus on large scale acquisitions. The investment would come from its global buyout fund Euro fund V, which has a corpus of $5 billion (about Rs 25,000 crore).
“India is emerging as a market for buyouts and that's why we have shown seriousness in that space. The recession has triggered chances of more buyout deals as people would exit non-core assets. One will see a wave of transactions beginning to happen," added Chhabria.