KKR wins approval to back India bad debt manager

The deal size is expected to be about INR 1.5 billion ($22.5 million) and will increase the foreign ownership in IARC from 58.75% to 78.96%, according to a filing. KKR has reportedly been in talks to invest in IARC since 2014; at one point Akhil Gupta of the Bharti Group was reported to be planning to invest alongside the firm.

IARC has around INR15 billion in assets under management, and is sponsored by HDFC Bank, ICICI Bank and Tata Capital Financial Services. Offshore investors include FMO Netherlands and Standard Bank of South Africa.

KKR already controls or holds a stake in several Indian non-banking finance companies (NBFC). One of the firm's NBFCs launched in 2009, while the other, a real estate-focused venture co-sponsored by Singapore's GIC Private, launched in January 2015. KKR also joined with LeapFrog Investments and India Value Fund Advisors last year to invest INR5 billion in Magma Fincorp.

Interest in India's distressed asset sector has grown as investors see a possibility of action by the government and the Reserve Bank of India (RBI) to enable banks to dispose of non-performing loans. The RBI has estimated that the total load of bad debts in India constitutes over INR7 trillion.

This month alone, J.C. Flowers and Canada Pension Plan Investment Board (CPPIB) have agreed partnerships with local firms to invest in distressed assets in India, while Everstone announced a new special situations vertical. Jim Coulter, co-founder and co-CEO of TPG Capital, also announced that the firm will invest up to $3 billion in Indian distressed assets over the next three years, while Edelweiss Asset Reconstruction Company is planning to raise INR20 billion from external investors.

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• Topics
• South Asia
• Financials
• Credit/Special Situations
• Expansion
• India
• KKR
• Special Situations
• Growth capital