Bain, Piramal target $1b for India distress fund

Bain and Piramal have made an initial commitment of $100 million each to the vehicle, called India Resurgent Fund (India RF), and could provide additional funds if needed. The International Finance Corporation (IFC), the investment arm of the World Bank, is also considering a $100 million investment, according to a disclosure.

The vehicle seeks controlling stakes in distressed businesses, along with acquisition of their debt, for the purposes of restructuring and revitalizing the businesses. All sectors other than real estate are eligible for investment, with preference for companies that have strong growth prospects linked to India’s infrastructure and consumption needs.

India RF was launched in 2016 as part of a wave of distressed asset JVs by global PE players and Indian investors seeking to take advantage of regulatory moves aimed at helping Indian banks clear out their backlog of non-performing assets (NPAs). For instance, Apollo Global Management formed an NPA-focused JV with ICICI Bank, while Brookfield Asset Management launched a distressed asset vehicle with the State Bank of India and J.C. Flowers partnered with Ambit Holdings.

Stressed assets continue to present an issue for India’s banks: according to the Reserve Bank of India their share of total loans in the banking system rose from less than 5% in March 2015 to 10.2% last September. The majority of these loans are held by public sector banks, for whom NPAs accounted for 13.5% of their overall loan book in September 2017. At the time, private sector banks’ NPA ratio stood at 3.8%.

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• Topics
• South Asia
• Fundraising
• GPs
• Credit/Special Situations
• India
• Bain Capital Asia
• Distress
• IFC