Contrarians bullish on India investment opportunities

"The fundamental factor is inflation. When the cycle turns and the savings rate goes above inflation and stays above inflation, that is when you will see a recovery," Bala Naidu, a managing director at Baring Private Equity Asia, told the Hong Kong Venture Capital and Private Equity Association's Asia forum. "For private equity investors, that means now it is the right time to invest."

Robert Petty, managing partner and co-founder of distress-focused investor Clearwater Capital Partners - which has an non-banking financial company (NBFC) license to do onshore lending in the country - added that he is seeing a lot of structured credit opportunities.

"If you are contrarian and you think there will potentially be a turnaround in the next two years, you have private equity-style capital and there is a credit market where you can get senior secured deals with a 20% coupon," he said. "That is pretty interesting."

According to AVCJ Research, despite more buyouts than ever before, India's  minority deals - which accounted for a significant portion of the $8.1 billion transacted last year - have dwindled due to uncertainty over public market exits and the economic outlook.

Meanwhile, recognizing India's demand for financial products that involve more than just equity, traditional PE firms are increasingly looking at structured credit alternatives. KKR is the most high-profile example - it launched its own NBFC in 2009.

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• Topics
• South Asia
• Credit/Special Situations
• Expansion
• Restructuring
• India
• Structured finance
• Clearwater Capital Partners
• Distress
• Baring Private Equity Asia