Mumbai: Temasek Holdings, the investment arm of the Singapore government, has overtaken Warburg Pincus as the largest private equity (PE) investor in India with more than $3 billion (Rs12,120 crore) investment in the country. The firm’s latest deal—$2 billion in New Delhi-based Bharti Airtel for a 4.99% stake—is its 15th disclosed investment so far. South Asia, which includes India and Pakistan, now accounts for 4% of its $164 billion global investment portfolio, four times bigger since its low-profile debut in January 2004.
The firm, which reported a 29% drop in net profit at S$9.1 billion (Rs26,390 crore then) for the year ended 31 March 2007, will continue to focus on growth investments in India, though it is also keeping tabs on potential buyout deals. “We are keeping our eyes open to buyouts, but we will not single-mindedly go after such deals. There is still a lot of traction in minority-stake, growth deals,” said Manish Kejriwal, senior managing director and country head, Temasek Holdings Advisors India Pvt. Ltd, on Thursday. This is the first time that the normally reclusive PE investor has officially released its year-end financial numbers simultaneously at its India and Singapore headquarters.
Temasek’s entry here in 2004 was greeted with much scepticism by the local PE community on account of its linkages with the Singapore government. Many in the industry doubted the firm would be able to shake off the shackles that came with being a government-controlled investor and push through deals fast enough. Temasek is 100% owned by Singapore’s ministry of finance. Now, with deals worth more than $3 billion under its belt, Kejriwal said the firm’s background has in fact been an advantage. “We do not have to restrict ourselves to a billion-dollar investment allocation target every two-three years and this allows us to be opportunistic in terms of deal types and sizes,” he said.
Reason to smile: Manish Kejriwal, senior MD & country head,Temasek.
Deal sizes for Temasek have ranged from less than $100 million to $2 billion. It has had a fairly successful track record in terms of exits as well. In August 2006, it liquidated its holdings in Hyderabad-based Matrix Laboratories, which was acquired by Mylan Labs for $736 million. Temasek had invested Rs607.5 crore along with TPG-Newbridge in 2004 for a combined 38% stake. Notable investments in Temasek’s portfolio include Tata Teleservices Ltd, Mahindra & Mahindra Ltd, ICICI Bank Ltd, Tata Sky Ltd, INX Media Ltd and Gateway Distriparks Ltd. It also invests in India as a fund-of-funds in a couple of real estate funds, whose names Kejriwal declined to disclose.
A fund-of-funds is an investment fund that uses an investment strategy of holding a portfolio of other investment funds rather than investing directly.