US bank JPMorgan plans to increase its private equity investments in India from $500 million (€340 million) to $1billion.
“Just given the state of public markets, there are opportunities for placements,” Kalapana Morparia, JPMorgan chief executive for India, told Bloomberg. “When public markets don't open up, they do placements,” she added.
Private investments in public enterprises in India are extremely popular. Last year, of the $14.3 billion in private equity deals, $4.4 billion was invested in publicly listed companies, according to India-focused data service Venture Intelligence. In terms of percentage of total private equity deals, PIPE investments grew from just under 20 percent in 2006 to more than 30 percent in 2007.
Since the Bombay Stock Exchange hit its all-time high in January this year, shares have dropped by about 33 percent, leaving private equity investors with large exposure to the public markets in an uncomfortable position. However, following the decline in the markets, the valuations have come down. As such, Indian fund managers have told PEO private equity investments in listed companies are not likely to decrease in the coming months.
Some of JPMorgan’s private equity unit’s investments in India include L&T Infrastructure Development Projects, which engages in public-private partnerships for infrastructure projects; Apollo Hospitals, one of the largest healthcare companies in Asia; and Coffee Day, a coffee conglomerate involved in coffee procurement, processing and retailing.
The bank also intends to spend about $500 million in building its corporate finance and advisory operations in the country, Morparia said.
Last month, JPMorgan Asset Management’s Asian Infrastructure & Related Resources Opportunity Fund held a first close on $500 million, a market source told PEO. That fund is focused on China, India and other Southern Asian countries.
The firm also has an India Infrastructure Fund which was launched last year and is targeting $2 billion, according to a white paper on Asia’s private equity market published by Probitas Partners.