News: Carlyle to invest $100 mn in India
(TNN 18/08/2006) Mumbai - Private equity major Carlyle Group hopes to invest around $100m in Indian companies by way of growth capital over the next one year, managing director Wayne W Tosu told ET on Thursday.
Carlyle had raised $668m in June for its third growth capital fund, Carlyle Asia Growth Partners III, which invests in companies in India, China, Japan and Korea in their initial stages.
“My plan... or rather hope, is that the investment through this platform should be close to $100m over the next one year,” Mr Tosu said. But he said the fund would not be focusing on any particular sector. Carlyle has outstanding investments to the tune of around $100m in Indian companies, which include Financial Software & Systems, Newgen Imaging Systems, QuEST, LearningMate Solutions, and Claris Lifesciences.
Mr Tosu said India and China were the main engines of growth for Carlyle. “Investors around the world are seeking growth and India and China are best placed to offer it, no other economy will see the kind of growth that these countries see over the next half a decade,” he said. “If you put one dollar in the US, you may get two dollars in three years. But if you put the same dollar in India, there is a high chance of getting three dollars,” Mr Tosu said.
From a private equity investor’s perspective, India and China offered differing opportunities, he said. “Indian corporates are professional by global standards, in comparison Chinese corporates are professional by Chinese standards, which are way below global standards,” Mr Tosu said.
The other advantage that India had over China for private equity investment is its well developed capital market system. “Indian stocks market is open and liquid. So private equity investors can easily buy companies and get them listed,” he said. China on the other hand has a weak capital market, and this forces many private equity funds to look offshore to list the companies in which they invest. But China also had its share of plusses.
“There is a strong public market for young companies in India, so corporates have the option of raising money from the public rather than PE investors,” Mr Tosu said. However, since that is not the case in companies in China, they increasingly look to PE investors as a source of funds. Mr Tosu said returns from top performers in China was usually higher compared with their counterparts in India. “However returns from India on the whole are consistent,” Mr Tosu said.
Carlyle had raised $668m in June for its third growth capital fund, Carlyle Asia Growth Partners III, which invests in companies in India, China, Japan and Korea in their initial stages.
“My plan... or rather hope, is that the investment through this platform should be close to $100m over the next one year,” Mr Tosu said. But he said the fund would not be focusing on any particular sector. Carlyle has outstanding investments to the tune of around $100m in Indian companies, which include Financial Software & Systems, Newgen Imaging Systems, QuEST, LearningMate Solutions, and Claris Lifesciences.
Mr Tosu said India and China were the main engines of growth for Carlyle. “Investors around the world are seeking growth and India and China are best placed to offer it, no other economy will see the kind of growth that these countries see over the next half a decade,” he said. “If you put one dollar in the US, you may get two dollars in three years. But if you put the same dollar in India, there is a high chance of getting three dollars,” Mr Tosu said.
From a private equity investor’s perspective, India and China offered differing opportunities, he said. “Indian corporates are professional by global standards, in comparison Chinese corporates are professional by Chinese standards, which are way below global standards,” Mr Tosu said.
The other advantage that India had over China for private equity investment is its well developed capital market system. “Indian stocks market is open and liquid. So private equity investors can easily buy companies and get them listed,” he said. China on the other hand has a weak capital market, and this forces many private equity funds to look offshore to list the companies in which they invest. But China also had its share of plusses.
“There is a strong public market for young companies in India, so corporates have the option of raising money from the public rather than PE investors,” Mr Tosu said. However, since that is not the case in companies in China, they increasingly look to PE investors as a source of funds. Mr Tosu said returns from top performers in China was usually higher compared with their counterparts in India. “However returns from India on the whole are consistent,” Mr Tosu said.
posted by InCar Group Press Room at 22:53
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