Firm is looking for opportunities in financial services, tech, internet, consumer, healthcare and logistics
Norwest seeks to double its investments in India and add more senior executives
Norwest Venture Partners India will double its investments in the domestic market and add more senior executives, including a managing director.
The investment firm is scouting for opportunities across sectors, including financial services, technology, internet, consumer, healthcare and logistics, said Niren Shah, managing director and head, Norwest India, in an interview on Friday.
Norwest Venture, which typically invests about $75 million a year in India, will henceforth write a minimum cheque of $7-8 million, which could go up to $50 million, a top executive said. “We will invest more in what has worked for us, and stay away from what has not. So, we will not do infrastructure deals, PIPE (private investment in public equity) or pre-IPO (initial public offer) deals," Shah said.
According to Shah, the firm will strike a “balance between investing in growth equity and the venture space". “Within the venture space, we will focus on companies like Swiggy, where we can be hopeful of significant return," he added.
To be sure, while exits have been the Achilles’ heel of the investment industry in India, Norwest India is among the few using various modes—acquisitions of its portfolio firms, secondaries and even IPOs— for exits. Five of its investee companies—RBL Bank, Sadbhav Engineering Ltd, Thyrocare Technologies Ltd, Persistent Systems Ltd and Snowman Logistics Ltd—have gone public.
Moreover, at least four more—Five Star Finance, Veritas Finance, NSE and Ess Kay Finance—are expected to launch their IPOs within the next two years. Online furniture retailer Pepperfry also plans to go public in 12-15 months.
Norwest India has also taken contrarian bets in growth-stage firms. On its investments of nearly $700 million between 2008 and 2017, the firm recently offered proceeds of $1.1 billion or returns to its investors (limited partners), Shah said.
One such contrarian bet was on RBL Bank (formerly Ratnakar Bank). Founded in 1943, RBL Bank was trying to reinvent itself from an old regional institute to a new-generation bank, but had a balance sheet of a mere ₹2,000 crore. Norwest India invested $20 million in the bank, which went public in 2016. The investment gave the firm an impressive return of 7.8 times.