Gajendra Patni, sons enter PE space

Launch Nirvana; hire executive from Clearstone to head private equity fund

Sons of India's top corporate honchos are in a hurry to set up funds in private equity space, already crowded with funds being launched by industry veterans.

Amit and Arihant, sons of Gajendra Patni, eldest of the Patni brothers, have set up Nirvana Venture Capital Ltd. The fund, co-founded by Gajendra Patni, was launched last month, according to sources in the family. The size could not be ascertained.

"Gajendra Patni Enterprises and Gajendra’s two sons have set up a PE fund," confirmed a source close to the family on condition of anonymity.

Aditya Parekh, son of HDFC chairman Deepak Parekh, has launched — Faering Capital, and raised Rs 830 crore for its first fund in February.

Recently, Patni Computers was sold in a $1.2-billion deal to US-listed iGate. Each of the brothers — Gajendra, Narendra and Ashok Patni — held about 14 per cent stake in Patni Computers at the time of the final exit. The brothers (had a total holding of 43.6 per cent) and PE player General Atlantic (16 per cent) sold their stake to the Nasdaq-listed iGate and Apax Partner combination for $921 million, excluding an open offer.

The 14 per cent shareholding of Gajendra Patni and his family will give him a share of $129 million (Rs 580 crore) from the total sale value.

According to sources, Nirvana has hired Rajan Mehra, venture partner, Clearstone Capital, as the managing director. Mehra was the country manager at eBay India and a member of the eBay Asia Pacific Leadership Team.

Amit Patni, chairman, Nirvana, could not be contacted, while Rajan Mehra did not respond to emails and phone calls.

Amit Patni heads the Patni Projects Pvt. Ltd (PPPL), a diversified infrastructure company promoted by members of the Patni family. Though the brothers have sold their stake in Patni Computer Systems, Ashok and Gajendra Patni also have controlling stake in PCS Technology, a computer hardware firm listed on the Bombay Stock Exchange.

Last year, Aditya Parekh had launched Farering Capital. Sameer Shroff, earlier with Morgan Stanley and management consultancy Booz Allen & Hamilton, is its managing director. The company's advisory board comprises Deepak Parekh and Adi Godrej.

Bain & Company, a leading global business and strategy consulting firm, in its latest report on Indian private equity, said the total amount of committed or un-invested dry powder to be deployed in India comes about $20 billion.

"To put that estimate in perspective, that amount is more than the value of all PE and venture capital investments made during the peak of 2007, and it is more than sufficient to fund all activity at 2010 levels for the next two years," it said.

According to VCCedge, there have been 406 private equity and venture capital deals with disclosed value of $8.62 billion in 2010 in India, as compared to 287 deals of $4.4 billion in 2009.

In order to grab the smaller pies of investments, a clutch of PE firms are in fray to raise funds, with focus on India.

According to Preqin, the PE research firm, 120 PE funds, seeking to raise approximately $34 billion in 2011, are currently on the road in India.

Veterans include former Baring PE partner Subbu Subramaniam, who set up MCap Advisors, former Warburg Pincus MD Rajesh Khanna, who set up Arka Capital, P R Srinivasan, former India Region Head of Citigroup Venture Capital International who set up Exponentia Capital and ex-ICICI Venture director Jayanta Banerjee, who floated Pravi Capital are in active fund-raising mode.

Ajay Relan, former head of Citigroup Venture Capital International, already raised $515 million through his fund-CX Partners. Renuka Ramnath, former CEO of ICICI has also raised about $400 million this year through her firm Multiples Alternate Asset Management.