Mumbai: Summit Partners, a 25-year-old private equity (PE) firm that has $11 billion under management, said on Friday that it had made its first investment in India with an infusion of $30 million in agricultural biotech firm Krishidhan Seeds Ltd (KSL). The deal, which took three months to close, is also Summit’s first in the agriculture segment.
Amit Chaturvedy, vice president of Summit Partners and soon to join the KSL board, said his firm has been looking at entering the Indian market for a year now. The deal took three months to close.
“When it came to the Indian economy we did not have a view that we have to invest in a specific sector,” Chaturvedy said. “We just looked for high growth companies and made this investment.”
Summit is the latest addition to a list of PE firms, such as Apollo Capital, Bain Capital and Quadrangle, that have made their first investments in India over the past six months.
Investments in agriculture-related businesses accounted for 5% of total number of PE deals in India, valued at $27 million, over the first three months of calendar 2010, according to data firm Venture Intelligence, a Chennai-based research firm that tracks private equity and mergers and acquisitions.
The sector had 10 deals worth $3.9 million in 2009 and and seven deals worth $118.8 million in 2008.
“Agriculture is a sector which in effect plays on consumers as there is a derivative demand. It is the consumer theme which is driving these type of investments,” said Bhavesh Shah, executive director (investment banking), JM Financial Consultants Pvt Ltd.
“While we are sector agnostic, certain sectors that we find interesting include agriculture, communication technology and education,” Chaturvedy said, adding that the focus in India will be on minority stake transactions in the range of $10 million-$100 million. .