Bain-Piramal fund invests $156m in Indian chemicals company

The proceeds will be used to refinance existing debt, support the optimization of the company’s plant in Gujarat, and provide working capital to grow market share domestically and across key export markets such as Japan, China, the Middle East, and Europe. India RF has invested through debt and equity on terms that allow for repayment once a turnaround has been fully implemented.

Founded in 1982, Archean’s interests cover industrial salt, marine chemicals, mining and minerals, and granite. The chemicals division produces sulfate of potash, gypsum, and bromine through the conversion of naturally available marine mineral deposits, chiefly sea brine. It is India’s largest producer and exporter of industrial salt and bromine, having launched operations in 2013 and 2014, respectively.

Shantanu Nalavadi, a managing director at India RF, said in a statement that the fund would work with the promoters and management to steer the business towards an accelerated expansion, growth and profitability.

Bain and Piramal formed India RF in 2016 – one of a string of partnerships between global private equity firms and local players intended to target the huge backlog of non-performing assets (NPAs) held by India’s banks. It emerged earlier this year that India RF wanted to raise $1 billion, having received $200 million in initial funding from Bain and Piramal, and with the International Finance Corporation (IFC) poised to contribute another $100 million.

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

Distressed asset investing in India has gained new impetus with the introduction of bankruptcy legislation and the government ordering the 12 largest distressed borrowers into insolvency proceedings last year – essentially driving a sea change in corporate culture. Meanwhile, banks have started pushing delinquent borrowers toward the newly-established National Company Law Tribunal (NCLT), which can order restructuring or liquidation.

NPAs across all financial institutions stood at INR8.5 trillion at the end of 2015. By the end of last year, the total more than doubled to INR20.7 trillion, representing 10.5% of loans in the country.

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• Topics
• South Asia
• Industrials
• Restructuring
• Credit
• India
• Distress
• Bain Capital Asia