Nayar elevated as KKR chairman, Trehan to head India PE business

Gaurav Trehan from TPG Capital has joined the firm as head of KKR's private equity business in the country

Global buyout major KKR on Monday elevated Sanjay Nayar, the CEO of its Indian arm, as chairman, while appointing TPG Capital’s Gaurav Trehan as head of its private equity (PE) business in the country.

Nayar will assume the new role from December 31 this year.

As chairman, Nayar will advise and assist KKR’s India business by leveraging his connections and experience across the country, KKR said in a release.

Nayar set up KKR's India business in 2009 when he became the CEO. KKR has invested over $5.8 billion in PE investments and $10 billion across credit, infrastructure, and real estate since 2006.

Under Nayar, KKR made one of the best returns in the industry. It made internal rate of return (IRR) of over 20 per cent in deals such as Dalmia Cement and Gland Pharma.

It invested about $3 billion in companies such as Reliance Retail, Reliance Jio, etc. this year, the highest by any PE firm in 2020 in the country.

Though Nayar declined to comment on his elevation, sources in the firm said “despite the challenges such as the IL&FS default, which led to liquidity issues in the shadow lender sector, both the non-banking financial companies (NBFCs) run by KKR — a real estate and a corporate NBFC— are fully liquid and have AA ratings.”

Though KKR faced major issues with investments in Gautam Thapar-led Avantha Holdings and Cafe Coffee Day, analysts last year said at least half a dozen KKR-financed firms that have defaulted on loans classify as non-performing assets (NPAs). These include Sintex, JBF Industries, and Kwality Dairy.

Its real estate NBFC, KR India Asset Finance (KIAFL), saw assets rise marginally to Rs 4,214 crore in FY20 from Rs 4,026 crore in FY19. Its profit after tax declined to Rs 48 crore in FY20 from Rs 164 crore in FY19. KIAFL’s overall capital adequacy ratio (CAR) was healthy at 46.78 per cent as of March 31, 2020. The comfortable capitalisation cushions the company against asset-quality challenges inherent in the business, CRISIL has said. KKR India Financial Services (KIFSL) is a finance company engaged in providing structured funding, promoter financing, and mezzanine financing.

Gaurav Trehan

According to CRISIL, its assets were flat at Rs 6,449 crore in December 2019 as against Rs 6,487 crore in March 2019. The provisional and unaudited results till December 2019 showed the company posted a loss of Rs 1,516 crore in December 2019 against a net profit of Rs 24 crore in FY19. The gross NPA rose from 2.1 per cent in March 2019 to 6 per cent in December 2019, CRISIL said.

Prior to joining KKR, Nayar had served as CEO of Citigroup’s Indian and South Asian operations and was a member of Citigroup’s management committee and Asia executive operating committee from 2002 to 2009. Nayar is on the board of several of KKR portfolio companies, including Radiant LifeCare, Max Healthcare Institute, Avendus Capital, Max Financial Services, Ramky Enviro Engineers, and Sterlite Investment Managers. He also helped expand the range of KKR’s credit and capital markets offerings across the Asia Pacific region. Currently, he is a member of the board of USISPF, and Sebi’s NISM Board of Governors, shows KKR’s website. Trehan had joined KKR earlier this year from TPG Capital Asia, where he spent more than 15 years and was most recently a partner in its India office.

“We are grateful to Sanjay for his role in establishing our business in India, partnering with and empowering local entrepreneurs to build their businesses into local and global champions, making KKR a leading investor in India, and helping to grow our Asia Pacific business. We look forward to Sanjay’s continued support in his new role,” said Joseph Bae, co-president and co-chief operating officer of KKR.

Ming Lu, head of KKR Asia Pacific, said: “Gaurav has established himself as one of India’s top private equity investors, and we are excited to add an executive of this caliber to our leadership team.” “With his strong investment acumen, relationship-oriented mindset, and his track record of creating value in companies, we are confident he will enable us to augment our ability to support the local economy and take homegrown businesses to the next phase of growth and development.” 

With inputs from Abhijit Lele