PremjiInvest invests $24m in India’s Trent

The investment was made via the qualified institutional placement carried out by the company, in which PremjiInvest acquired almost half the 2.74 million shares on offer. It injected the capital via its PI Opportunities Fund I in exchange for 1.33 million shares, equivalent to a 4.91% stake.

Standard Chartered Securities (India) and JM Financial Consultants managed the share issue, which was reportedly more than 2x oversubscribed.

PremjiInvest becomes the second largest shareholder in Trent after Tata Group, which retains 28.6%. Other stakeholders include Xander Group founder Siddhartha Yog, Norwegian sovereign wealth fund Government Pension Fund Global and several mutual funds and insurance companies.

For the nine months to December 2011, Trent generated a turnover of INR6.59 billion and a profit of INR277 million. The retail operations company owns and manages Indian retail chains including Westside, Star Bazaar, Landmark and Fashion Yatra. It intends to use the fresh capital to establish new retail outlets and make investments in retail real estate developments. The cash will also bolster working capital needs.

This investment by PremjiInvest is an apt example of the current tendency for Indian family offices to invest via their own private equity arms to serve their own interests rather than investing in a third-party GP. Vikram Utamsingh, head of transactions and restructuring for KPMG in India, told AVCJ recently: "If you go many Indian business groups for $10 million for a private equity fund, they wouldn't give it to you. They prefer to reinvest their billions in their own businesses."

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