Business Today – August 25, 2019

other sources to pare debt as servic-

ing high leverage eats into profits

and growth.

After divesting its entire stake in

tower assets to Brookfield, RIL will

get `12,000 crore, which will help

it reduce its own outstanding debt

of `2,88,243 crore as of March 31,

2019, by 4 per cent. Similarly, the

`8,000 crore invested by Singapore

sovereign wealth fund GIC and SSG

Capital Management in GMR Air-

ports last May will help the company

reduce its `20,000 crore net debt as

of December 2018. This is the largest

PE deal in India’s airport sector.

According to Ranu Vohra, Co-

founder, MD and CEO of Avendus

Capital, both demand and supply

factors are leading to a growing ac-

ceptance of PE firms by top compa-

nies. “On the demand side, a lot of

promoters are trying to deleverage

single-biggest PE deal ever in
India. Reliance Jio Infratel,
the tower arm, will use the
money to repay part of its
37,000 crore debt, includ- ing the12,000 crore owed
to RIL.
This comes just months after
Brook f ield ag reed to buy RIL’s loss-
making East West Pipeline, also
known as Reliance Gas Transpor-
tation Infrastructure, for `13,000
crore in the largest ever deal in the
infrastructure sector.
In July last year, Abu Dhabi In-
vestment Authority (ADIA) and
TPG Capital Asia invested $1.2 bil-
lion ($600 million each) for a 22 per
cent combined shareholding in UPL
Corp, a unit of listed agrochemicals
giant UPL Ltd, in the largest trans-
action in that space.
“Earlier, PE firms were doing
mega deals with either new compa-
nies or mid-level corporates and tak-
ing them public in a couple of years.
But now they are doing much bigger
and more deals with larger compa-
nies,” says Arun Natarajan, Founder
of Venture Intelligence, a data and
research firm on private company fi-
nancials and transactions.

Debt Distress
“The fact is that at this point of time,
when capital is not available from
banks, top PE firms are moving
around in India with open cheque
books. And big companies don’t need
mid-level money,” says Natarajan.
The combined debt of all BSE-
listed entities has gone up by 13.2
per cent in 2018/19 while corporate
earnings have been almost stagnant
for the last five years, making it im-
perative for companies to look for

36 IBUSINESS TODAYIAugust 25 I 2019

FINANCE>PRIVATE EQUITY

Reliance Jio

Infratel*

Brookfield

3,600

Pipeline

Infrastructure

India*

Brookfield

1,875

UPL Corp

ADIA, TPG

Capital

1,200

GMR Airports

Holding

SSG Capital,

GIC, Others

1,143

HDFC

KKR, GIC,

Others

1,062

Reliance

Comm**

I Squared

Capital

1,000

Bharti Infratel

CPPIB, KKR

955

L&T Electricals

& Automation

Temasek

760

Bharti Airtel

GIC

715

Prayagraj

Power Gen. Co.^

KIA, SGRF,

CDPQ, ICICI

Venture, Others

828

Company
PE Investors
AMOUNT
($ MN)
PE DEALS WITH LARGE
BUSINESS GROUPS IN
LAST THREE YEARS

*Part of Reliance Industries

**Share sale

^Part of Tata Group

Source: Venture Intelligence

“At this point of

time, when capital

is not available

from banks, PE

firms are moving

around with open

cheque books”

Arun Natarajan

Founder, Venture Intelligence

Power Gen. Co.^Power Gen. Co.^