Baring plans bigger PE India fund

Baring India Private Equity, which manages two India-specific funds "� $40 million and $175 million assets respectively, plans a bigger third India PE fund to be launched in the second half of the next year, Rahul Bhasin, its managing director, said.

"Capital is no longer a constraint. Historically, we have been investing in India through multiple funds and through multiple vehicles. We are going to raise more and more India-dedicated funds. We are shifting away from our older route," he told Business Standard in an interview.

While the $40 million first fund, which was closed in 1996, is fully invested (it is also in the process of exiting from some of the investments, the most notable being the Mphasis BFL stake sale to EDS), the $175 million Baring India Private Equity Fund II, raised in 2004 December, is 60 per cent invested.

Bhasin said there are significant opportunities for private equity investments all around the country, especially in healthcare, technology, alternative energy, engineering services and FMCG sectors.

Baring's life sciences and medical technology investments include companies in medical devices, pharmaceuticals and healthcare services space.

The PE fund is close to invest $50 million in the Chennai-based Auro Mera Energy Company, which is into biomass-based plants.

"We are bullish on alternative energy," Bhasin said, pointing out that compared to other PE funds in India, Baring had a longer-term outlook for its investments, ranging from 12 to even 15 years.

Among the global investment destinations, India figures among the top-three countries for Baring Private Equity International, after Russia and China. Brazil and Mexico follow India in the most preferred destination for the PE major.

Asked if the restrictions put on foreign investments in some sectors, such as retail and insurance, Bhasin said there are ample opportunities for investments in several other sectors in the country.

"There are enough opportunities in a range of sectors. Why should we bother about restrictions in some sectors when there are enough and more opportunities outside these sectors," he asked.

"We seek companies with substantial global potential. They must be able to demonstrate that an under-served, growing and substantial market exists for their product. The company should have the potential to achieve a listing or a trade sale within four to seven years," Bhasin said.