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Olympus to invest $300 Million in India
By siliconindia
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Thursday, 22 July 2010, 22:24 IST
Mumbai: Hong Kong-based Olympus Capital Holdings Asia, a private equity (PE) firm with $1.3 billion, will invest $300 million in India over the next three years. Earlier this month, Olympus has invested $300 million in Tata Power, a part of the Tata group, reports Shraddha Nair and Aveek Dutta from the Mint. It was Olympus' largest deal in India. Of its recent $750 million fund called Olympus Capital Asia III Lp, a maximum of 40 percent could be invested in India.
To date, the PE firm has deployed $500 million in India across five deals, which include investments in Orient Green Power, a renewable energy company sponsored by Shriram EPC, and Quatrro BPO Solutions.
"The quantum of trade and investments within Asia is growing fast and as a regional fund, it's a very good opportunity for us to invest in India," Daniel R. Mintz, founding managing director of Olympus Capital, said in an interview. "Our sweet spot would be $50-100 million." Olympus would look at an internal rate of return of at least 20 percent from its investments in the country, Mintz added.
In India, Olympus is evaluating deals in the green energy or environmental space, for which it has a dedicated $250 million fund. It is also scouting for opportunities in the agri-business space and more broadly in infrastructure. Analysts say that with a growing need for capital as several infrastructure projects are on the anvil, PE firms would play an increasingly important role in the sector.
"Strategic investors in the form of foreign utilities have withdrawn to an extent following the global financial turmoil and public offerings are only possible for large companies," said Kuljit Singh, partner, infrastructure transaction advisory services, Ernst and Young. So PE firms are the only ones with the capital and the appetite for such investments, he adds.
A 20 July report on PE in India by international consulting firm Bain and Co. has noted that from 2004 to 2008, PE and venture capital firms invested nearly $43 billion in India, the fastest growth rate in Asia over that period. Together with China, India looks poised to lead the growth of PE in Asia, powering it beyond the levels of the 2007 cyclical peak by 2012, it said.
In the first half of 2010, total PE investment in India was $4.5 billion across 138 deals (excluding real estate). This was a three fold jump over the $1.508 billion invested in 111 deals during the same period last year, according to data by Venture Intelligence, a Chennai-based research service focused on PEs and merger and acquisitions.