It can be considered among the fastest fund-raising activity in the recent past. Westbridge Capital Partners, revived during mid-February 2011, is understood to have firmed up commitments of close to $500 million within a short period of hardly six months for a public markets fund which they set out to raise.
K P Balaraj, Sandeep Singhal, S K Jain and Sumir Chadha the four founding partners of WestBridge split from Sequoia India to set up this new fund which will focus exclusively on taking positions in publicly-held Indian companies. The four exited Sequoia India as that fund is passive on public markets. The four founding members continue to be on board of around 20 companies in which Sequoia had invested and will continue to be there until an exit happens. Westbridge, founded in 2000, raised two funds before merging with Sequoia Capital in May 2006. By the time these four partners exited, Sequoia had assets worth $1.8 billion and has around $600 million left to invest from various India-focused funds. WestBridge offered not to comment on the fresh round of fund raising.
WestBridge is hoping to ride on the growth stage of public markets fund in India akin to the kind of growth stage of venture capital they saw in 2000 when their venture fund was started.
“There are very few str-ong organised players who are into value investing in public markets. The ecos-ystem is also nascent. We intend to capitalise on this,” Chadha told Business Standard. In addition to WestBridge entering the public markets space, ChrysCapital and Nalanda Capital are the other two well-know names which have made a mark in public markets.
Azim Premji, chairman of Wipro Limited, also runs a $1 billion private and public equity fund with a majority focus on public markets.
WestBridge is among the many funds raising India-focused funds and close to $6 billion is being raised during 2011, according to independent research.
During 2010, a total of $15.5 billion was raised as part of the India invest-ment story. According to industry analysts, there is an increasing trend of PIPE deals (Private Investment in Public Markets) in the market place with more and more funds looking at this segment.
According to data from Venture Intelligence, a research service focused on private equity & M&A, so far during 2011, 21 deals have been executed worth $633 million. During 2010, a total of 38 deals were done worth $708 million.
More and more private equity funds are increasing their play in India and this is being reflected in the gro-wth of investments in the first half of 2011. The value of India Inc’s merger and acquisition (M&A) and private equity (PE) transactions in the first half of this year touched nearly $32 billion, according to consultancy firm Grant Thornton.
While the M&A deal value so far this year is 7 per cent lower in comparison to the same period last year, PE investments have risen over 70 per cent. The first six months of this year saw M&A deals worth $26 billion while in the corresponding period last year the deal value amounted to $28 billion.
A notable trend in mer-gers and acquisitions in 2011 has been the shift from outbound deals to inbound deals.
“Several inbound deals have happened at prem-ium valuations showing that Indian businesses have become attractive invest-ment opportunities for glo-bal corporates,” Grant Thornton added.