Warburg Pincus continues to bet big on India

Gurugram, India. Photo: Alok Sharma/unsplash

American private equity firm Warburg Pincus Llc., which manages assets of over $62 billion across the world, on Thursday said it sees India as an attractive investment destination with the best risk-reward ratio compared to other countries.

“At Warburg, the percentage of the fund that is going into India investments right now is 15-20% of our global fund. I am convinced that the next few years will provide the best risk-reward vintage for investing in India,” said Vishal Mahadevia, managing director and head, India, Warburg Pincus, speaking at the Mint India Investment Summit and Awards 2020 in Mumbai.

Last month, the PE fund had said that it was investing $150 million in Apollo Tyres Ltd. Its other recent investments include a 10% stake in SBI General Insurance Co. Ltd and a joint investment with Runwal Group to build malls.

Warburg’s positive outlook for investment opportunities in India comes at a time when the country is bracing for the impact of the Covid-19 outbreak, amid softening credit growth and an overall slowing economy. India’s economic growth in the December quarter slowed to an over six-year low of 4.7%, as manufacturing output continued to contract.

The woes of a slowing domestic economy are multiplied by the rapid spread of Covid-19, prompting the Organisation for Economic Cooperation and Development (OECD) slash India’s growth forecast for 2020-21 by 110 basis points (bps) to 5.1%. It also warned that the impact of the outbreak on business confidence, financial markets and the travel sector, including disruption to supply chains, could shave 50 bps off global growth in 2020. One basis point equals 0.01%.

Warburg’s conviction is backed by its efforts to raise a separate pool of capital for investing in India. The PE firm generally invests across geographies through a single global fund. Last November, Reuters had reported that Warburg was looking to raise up to $1.5 billion for its first fund targeting deals in India.

However, Mahadevia added that while the country remains an attractive destination, the industry needs to see more exits from investments in India, which will help build confidence among foreign investors to put more capital to play. “We need more exits, we need better stories that we can celebrate.”

Warburg Pincus, with an active portfolio comprising over 190 companies across sectors and geographies, established its first institutional fund in 1971. The PE firm has raised 19 funds, investing $81 billion-plus in over 890 companies across more than 40 countries.

This article was first published on livemint.com.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.