PRIVATE equity firm Warburg Pincus LLC is looking to raise up to $1.5 billion or £1.16bn for its first fund targeting deals in India, two people familiar with the matter told, betting on a surge in investment opportunities in Asia’s third-largest economy.
Warburg plans finish fundraising on its India-focussed fund, which will target industrial sectors such as financial, manufacturing and consumer, by the first half of next year, said one of the people.
Launches of India-focused private equity funds are rare, and big global buyout firms such as KKR & Co Inc, Bain Capital and Blackstone Group Inc typically invest in a country mainly from their regional funds.
Warburg declined to comment. The sources did not want to be identified as the firm’s plans are not public yet.
Private equity investments are expected to pick up in India as some companies look to sell shares to fund growth, while some family-owned firms explore selling controlling stakes to pay off debt, bankers said.
Lower valuations, a rapidly growing middle class and reforms such as bankruptcy resolution rules are also enticing global private equity firms to invest in India.
Private equity-backed deals in India have risen to a record $16.8bn so far this year, rising up from the previous high of $12.4bn last year, according to data compiled by Refinitiv.
The news of Warburg’s India fundraising plan comes as rival KKR is looking to raise a record $15bn in 2020 for its latest Asia-focussed buyout fund, which will include India investments.
Warburg has not finalised the size or launch timing of the fund, which depend on market conditions, said one of the people.
Warburg has a 21-person investment team in Mumbai, according to its website. It was Indian telecom company Bharti Airtel’s first marquee investor in the early 1990s and has recently invested in its digital TV and African arms.
The private equity firm also holds stakes in local insurer IndiaFirst, retail real estate platform Virgo Retail Ventures, and education financing provider Avanse Financial Services, according to its website.
In June, the US-based firm closed a $4.25bn private equity fund focusing on Chinese and Southeast Asian investments after launching the exercise in January with a target to raise $3.5bn.
That fund, China-Southeast Asia II, will focus on investing across consumer and services, healthcare, real estate, financial services, and technology, media and telecommunications, Warburg had said in June.