The combined revenue of entities under Mahindra Partners has grown from $300 million in 2009 to $900 million at the end of 2013.   (The combined revenue of entities under Mahindra Partners has grown from $300 million in 2009 to $900 million at the end of 2013.)
The combined revenue of entities under Mahindra Partners has grown from $300 million in 2009 to $900 million at the end of 2013. (The combined revenue of entities under Mahindra Partners has grown from $300 million in 2009 to $900 million at the end of 2013.)

Mahindra Partners eyes media, healthcare business

The part PE firm, part incubator, which trebled revenue of the new businesses in its fold over the past four years, is looking to foster businesses in media, healthcare, and big data

The combined revenue of entities under Mahindra Partners has grown from $300 million in 2009 to $900 million at the end of 2013. Two of its businesses, Mahindra Logistics Ltd and Mahindra Intertrade Ltd already rank among the 10 best performing companies in the $16.2 billion by revenue Mahindra group.

The group has traditionally used Mahindra Partners as a vehicle to help it diversify into new areas, and it will continue to do the same, an executive said.

“We are going to get into new sectors such as healthcare, big data and media. These are sectors that will grow in the future. We will help Mahindra touch a new customer segment that has so far been untouched by it," said Parag Shah, managing partner at Mahindra Partners.

Mahindra Partners currently manages 12 entities across sectors such as retail, leisure, consultancy, cleantech and logistics.

Shah said the firm is looking to enter the media business through an investment or acquisition.

“We have plans to enter the service and infrastructure side of media. This will be announced shortly," he said.

Experts say the private equity model of Mahindra Partners allows for a free flow of funds to new businesses even as it ensures that the broader diversification objectives of the parent are met.

The division, jointly managed by Parag Shah and Zhooben Bhiwandiwala, incubates new businesses using funds from the parent company—Mahindra and Mahindra Ltd. Growth capital for these ventures comes from both the Mahindra group and other private equity firms.

Mahindra Partners has also started making purely financial investments in firms outside the Mahindra group. In 2011, it bought a minority stake in London-based luxury products company The East India Co. for an undisclosed amount.

“The Mahindra group makes seed investment to incubate the businesses under Mahindra Partners from its proprietary capital. Hence, the challenge of getting angel funding for such ventures is resolved," said Prakash Nene, chief financial officer at Multiples Alternate Asset Management Pvt. Ltd, a private equity firm.

The two top performing businesses under Mahindra Partners, Mahindra Logistics and Mahindra Intertrade, are considering a public listing.

The logistics business may list in the next three years, said Shah. Started with an initial investment of 30 crore, the valuation of Mahindra Logistics now stands at 870 crore. The logistics business will specialize in agri-logistics, an area so far untapped in India.

“The likes of Federal Express and DHL are unlikely to venture into the agri-logistics space in India. We see a big opportunity here," said Shah.

Last month, private equity firm Kedaara Capital Investment Managers Ltd bought a 23% stake in Mahindra Logistics for 200 crore.

Mahindra Intertrade, the steel trading arm will also likely sell shares to the public. Its revenue has grown from 966 crore in fiscal 2010 to 1,444 crore in fiscal 2013.

Mahindra Partners will also assist Mahindra group making inroads in various geographies either through investments or through its existing businesses.

“If Mahindra Partners is able to study the law of the land in a particular geography and make a couple of investments there, the group will be able to make more informed decisions (about that market)," Shah said.

For instance, Mahindra Consulting Engineers Ltd, a venture under Mahindra Partners is already assisting the Mahindra group with its Africa strategy.

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