ADIA buys stake in KKR India Financial Services
Mumbai: The Abu Dhabi Investment Authority (ADIA), a sovereign wealth fund owned by the Emirate of Abu Dhabi, has acquired a minority stake in KKR India Financial Services Pvt. Ltd (KIFS), KKR said on Monday.
KIFS, an alternative credit business of global private equity leader KKR & Co. in India, has received an undisclosed amount from an entity wholly owned by the ADIA, according to an official statement from KKR. Further details of the transaction were not disclosed.
“India continues to be an underserved financial services market, with shallow capital markets and an over-reliance on banks for wholesale financing. KIFS has consistently provided flexible credit financing solutions to companies and shareholders, keeping in mind their long-term objectives for their business,” said B.V. Krishnan, member at KKR and chief executive of KIFS.
ADIA has been investing in India as a limited partner (or LP—an investor in a private equity fund) and has partnered with several private equity funds in India.
ADIA had announced a plan to invest $1 billion in the National Investment and Infrastructure Fund (NIIF), as an agreement had been signed between NIIF Master Fund and a wholly-owned subsidiary of the ADIA, in October.
Besides its investments as LP, the Abu Dhabi wealth fund has been making direct investments in India for the last couple of years.
Last month, ADIA had acquired a minority stake in Cube Highways and Infrastructure Pte. Ltd, a road platform formed by I Squared Capital and World Bank’s International Finance Corp. (IFC).
In 2015, ADIA acquired a minority stake in Indian renewable energy producer ReNew Power Ventures Pvt. Ltd with an investment of $200 million.
The fund also invested $230 million in clean energy company Greenko Energy Holdings, last year.
“India is one of the world’s fastest growing and most dynamic markets, and Indian businesses are increasingly seeking alternative credit solutions. KIFS has played an integral role in the development of this important form of financing in India and, through our investment in the company, we look forward to supporting the continued evolution of the market,” said Hamad Shahwan Al Dhaheri, executive director of the Private Equities Department at ADIA.
KIFS has provided about $4 billion of financing to companies over the past eight years in India’s structured credit space.
Through structured financing, KKR has funded close to 70 companies in India, some of which are GMR Holdings Pvt. Ltd, Avantha Group, TVS Logistics, coaching company Resonance Eduventures Ltd, Radiant Life Care Pvt. Ltd as well as Apollo Hospitals Enterprise Ltd.
KKR India Financial Services was incorporated in 1995 as a non-deposit taking, non-banking financial company (NBFC).
Besides KIFS, KKR’s lending business in India is operated through various other arms—KKR India Alternative Credit Opportunities Fund, the first Alternative Investment Fund (AIF) raised by KKR India; and KKR India Asset Finance Pvt. Ltd, a realty-focused NBFC.