“India Remains A Compelling Investment Destination"

Sanjay Nayar, CEO, KKR India, speaks with BW’s Munnish Puri about KKR’s focus on India

What is KKR’s focus and investment corpus in India?
KKR has been investing in India since 2006. It strengthened its commitment to the market by opening a Mumbai office in 2009.

Broadly, in India, we have four business streams: private equity, credit NBFC, real estate NBFC and a special situations fund that KKR has activated in the case of JBF industries, while having currently applied for a 100 per cent-owned asset reconstruction company.

KKR has invested approximately $1.7 billion in 13 private equity transactions since 2006; extended more than $3.2 billion of structured financing to business groups in India through its credit, NBFC and capital markets businesses; and invested approximately $200 million from its ‘special situations’ business as of March 2016.

From an investment strategy standpoint, what is your philosophy?
KKR has the flexibility to take minority as well as majority value -added stakes, which is truly an advantage. We have a sharp focus on deals that are beyond the purview of banks. We believe in shifting the focus towards operational value-add, larger deals; and break away from thematic play and cheaper sectors.

With regard to sectors, manufacturing is looking exciting, and there is an operational ease due to the government’s concerted efforts towards developing a conducive environment.

Investors are more comfortable with governance, transparency, and opportunity; and private equity is expected to bridge the requirement for growth capital. The challenge now is to find opportunities where the market is big enough; where there is scope for consolidation; and where investors are looking at reduction in cost of capital. Overall, consolidation is key, and an intellectual approach towards investment will accelerate success in the sector.

We also build platforms for strong and promising founders like in the case of Avendus Capital and Emerald Media. We value long-term and deep relationships with all business partners.

What are the key portfolio companies in KKR’s core portfolio?
Our key private equity portfolio companies include: Café Coffee Day, Magma Fincorp, TVS Logistics, Alliance Tire Group, Gland Pharma, SBI Life Insurance, Avendus Capital, Max Financial Services, and Emerald Media.