India likely to see spate of exists by private equity funds

With a stable government at the Centre and economic reforms taking place resulting in a surge in the stock market, more and more exits are likely to take place by private equity (PE) funds in India in remaining part of the current fiscal, experts have said.
However, these exits will also result in inflows of foreign capital by a new set of PEs, according to them.
There were 31 exits by PEs during the second quarter of the current fiscal as against 26 during the corresponding period of the last financial year.
PEs sold shares to the tune of Rs 4,400 crore in their listed portfolio companies during the second quarter of FY15, said a report by Venture Intelligence, a research service focused on private company financials.

New Silk Route, a global PE, is said to have exited from Destimoney, a retail financial services and distribution firm, and sold its entire stake to another PE, Carlyle.
"Exits will happen in India if PEs find that they can give returns to their shareholders. Moreover, PEs are now looking for investment in India and Africa," Coller Capital's Investment Principal Giovanni Davide Orsi told PTI.

"We are planning to invest USD 150 million in India over the next 4-5 years, out of USD 6 billion fund we have with us as of now, given the favourable political environment in India," he added.

A domestic PE firm, Tata Opportunities Fund, which has invested nearly half of its fund (USD 600 million) in India so far, feels more PE exits are expected in the country.
"There would be more opportunities for exit by PE funds with capital market surge. However, it will all depend on companies," Fund Partner Gautham Radhakrishnan said.
Exit by the existing PEs will also mean investment by other PEs in the country, according to KPMG India.
Bain Capital Advisors, which invests in India through its USD 2.3 billion Asian fund, is upbeat on the reforms taking place in the country.

"PEs want reforms to take place. For example, the passage of Insurance Bill in Parliament will not have a dramatic macro impact on its own, but it will demonstrate the new Government's ability to get reform laws passed.
"Similarly, GST rollout will be viewed very positively and will have significant impact," Bain Capital Advisors Managing Director Pavninder Singh said.
"As Government ushers in more reforms, investor confidence will increase. New players will come in with strategic and financial investments. This will lead to a number of exits that are held up or limited thus far through capital markets and/or new set of investors coming in," KPMG India Partner Manish Aggarwal said.