SBI, Edelweiss create $100m India PIPE fund

"India is the second-fastest growing economy in the world and this growth story is best being captured by hundreds of small and mid-cap companies that are poised to create long-term value," said Rashesh Shah, chairman and CEO of Edelweiss, in a statement.

Edelweiss, which raised a $230 million special situations fund in 2011, is branching out into multiple areas of financial services, and already has an insurance joint venture with Japan's Tokio Marine Holdings.

Yoshitaka Kitao, CEO of SBI Holdings, said the partnership with Edelweiss was one of a number of alliances the firm had struck in order to develop its overseas asset management business. SBI now has 16 joint venture funds with local players in various markets.

The new venture is yet another sign of the popularity of PIPE deals among Indian private equity investors. Interest has been facilitated by the Securities and Exchange Board of India's (SEBI) decision last year to increase the ownership threshold at which investors are obliged to launch a takeover bid for an asset from 15% to 25%.

However, the likes of ChrysCapital and WestBridge Capital have been pursuing a PIPE strategy for years. Speaking at the AVCJ India summit last December, Ashish Dhawan, co-founder of ChrysCapital, identified convincing foreign LPs of the value of PIPE deals as a key point in the private equity firm's development. He later argued that PIPE and private deals are joined at the hip in India, noting that ChrysCapital's core competence is the mid-market space, regardless of whether or not target companies are listed.

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• Topics
• South Asia
• North Asia
• PIPEs
• Fundraising
• India
• Japan
• SBI Holdings
• PIPE
• Fundraising