Everstone Capital Partners has invested INR 2.2 billion (€30 million; $41 million) to take a significant minority stake in Transpole Logistics, an India-based logistics services business, according to Dhanpal Jhaveri, chief executive of Everstone.
Transpole offers distribution, freight and warehousing services and has 18 offices in India, with international offices in Malaysia, Singapore, Hong Kong, South Korea and China. The capital will be used to open more offices across the region and grow the business.
“The founders are professionals that spent a long time in the logistics industry and decided to start their own business in 2004,” Jhaveri told Private Equity International. “We have a strong interest in logistics and on the real estate side we have invested in building warehousing and industrial parks from our real estate funds. On the private equity side this would be our first investment in the freight logistics space.”
The firm has been investing its $580 million Everstone Capital Partners Fund II, which closed in March 2011. Everstone has now deployed $196 million of capital from the fund over five investments, according to the firm.
He said Everstone is seeing more high quality private businesses in India looking for capital due to continuing pressure from a tight liquidity situation in the country.
Jhaveri added that global firms are increasing their efforts in India. “Given that fundraising activity has been muted, we largely see interest from established local GPs and global funds who are looking now to make a serious effort to invest in India,” he said.
Downbeat sentiment about India's macro-economic environment was reflected in lower deal value in 2012, with 398 deals worth $7.3 billion made during the year, according to a recent report by Grant Thornton. This was a 16 percent decrease in value from the $8.7 billion invested during the previous year.
However, Anuj Chande, head of South Asia at Grant Thornton, was upbeat about India in 2013 due to regulatory developments. He said, in a statement, “Reforms unveiled by the Indian government in December 2012 included allowing overseas multinational retail giants to own up to 51 percent of multi-brand stores, foreign investors to own up to 49 percent of domestic air carriers, and foreign media conglomerates to increase their ownership of broadcast media from 49 to 74 percent.”
He continued, “Additional reforms were promised by the finance minister to reduce government spending and implement a more transparent, non-retroactive tax regime for investors. The timely and effective implementation of these reforms should support the medium-to-long term growth prospects of the Indian small caps for 2013.”