Baring Private Equity Partners India Ltd plans to launch its third India fund, with a corpus of at least $175 million (Rs717.5 crore) this year to target the energy and the knowledge process outsourcing (KPO) sectors.
“Our third fund will be launched in the second half of 2007. Though the size of the fund is not yet decided, it will be substantially more than $175 million,” said Karthik Ranganathan, head (investments, alternate energy and engineering service), Baring India.
He declined to elaborate.
Baring’s interest in the country is an example of the private sector investment in infrastructure in India and is a part of the bigger story about how new private sector commitments to infrastructure could reach more than $10 billion this year.
Baring Private Equity Partners was founded in 1984 and has operations in Latin America, Europe, Russia, Asia and India. The company already has two funds operating in India with interests across sectors such as information technology, life sciences, financial services, energy and fast moving consumer goods.
The private equity firm’s third fund will focus on consumer-oriented sectors. “We are also evaluating opportunities in logistics, warehousing, road, rail, shipping and luxury goods sectors among others,” Ranganathan said.
Ashvin Parekh, partner (financial services) at audit firm Ernst & Young said, “It is a very positive and welcome move as India is a very encouraging market. The India-centric funds are getting good returns for their investors.”
In another instance of the group’s growing exposure in Indian projects, Hindustan Oil Exploration Co. Ltd, in which Burren Energy has a stake, is looking at striking a partnership with another Indian firm to jointly bid for the next round of the country’s exploration licences.
Baring Vostok Capital Partners has invested in Burren Energy and is a part of Baring Private Equity Partners.
The government plans to offer around 80 blocks over around three lakh sq. km in the seventh New Exploration Licensing Policy round. Of this, more than 30 blocks on India’s west coast are located in waters with a depth of 90-100m.
Even before the much-delayed rounds are announced, frantic negotiations have started among Indian firms for partners. Companies such as NTPC Ltd are looking for foreign entities to partner them in the next round.
Baring’s Indian operations started in 1997 with a $40 million fund and its second India fund of $175 million. Its two funds have invested in companies such as Mphasis BFL Software Ltd and Integra among others.
“We are focusing on alternative energy projects as they have a small gestation period and are comparatively smaller as compared to the conventional power projects,” Ranganathan said.