Everstone Capital expects to invest as much as $200 million by the end of the year. But Dhanpal Jhaveri, partner and CEO of the firm that manages over $1.7 billion worth capital, is not in a hurry. “We are under no compulsion to invest,” he says. “But we expect to make a few investments this year.”
A few months ago, the firm invested Rs 150 crore in a pesticide company called Crystal Crop Protection. The company which also dabbles in farm equipment, is the market, which Everstone would like to tap going ahead.
The company plans to follow the consumption theme, will focus largely on rural areas. “There is a lot of initiative to improve farm income and provide labour opportunities in rural markets,” notes Jhaveri.
Everstone also claims to have noticed a change in the manner of farming. While it was once viewed as a method of subsisting, it is now seen as a profit-making proposition. Everstone believes that there is a huge gamut of products and services that will gain from the growth in rural markets.
Traditionally known for its investment in real estate, the firm plans to extend this to growth in rural areas especially in the form of warehousing facilities, and industrial real estate.
“There are new real estate opportunities developing beyond commercial and residential spaces and we are bullish on the industrial real estate space,” says Jhaveri. “For instance, IndoSpace, our fund that invests in developing modern industrial real estate and warehousing facilities across India, is developing a two million square feet facility at Chakan (off Pune). It will be a modern warehouse, distribution and light manufacturing space.” The firm will largely focus on third party logistics services.
But, will the new policy paralysis at the government level hinder any of its investment plans? Only partially, the firm concludes. Jhaveri says there are sectors that are completely dependent on government policy, and some which are not very largely affected by policy and has some market elements around its performance.
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“Education is a sector where lack of clarity in regulations can create uncertainties. On the other hand, there are sectors driven by domestic consumption which are not as affected by regulations,” he says. Everstone would not look at sectors in which the policy framework is unclear.
Personally, Jhaveri says that he would like see some clarity on issues such as the Goods and Service Tax, which could bring in much required clarity to the logistics sector.
Everstone, founded in 2006, is also hoping to exit from two or three of investments this year. This, in times when capital markets are still volatile and initial public offers are slow. “The exits might not necessarily be through IPOs,” says Jhaveri. “We can also exit through sale to other financial and strategic investors.”
The firm has, in fact, exited from investments that were bought out by other investors. Last year, it sold its stake in kids wear company, Lilliput, to other private equity firms like TPG and Bain.