Gujarat-based mid-sized private enterprises with a turnover of around Rs 200 crore seems is becoming favourite for the foreign private equity (PE) investors.
Some of the leading global private equity funds have initiated talks with the private companies in Gujarat having operations in the automobiles, auto ancillary manufacturing and real estate.
Around seven to ten mid-sized companies from Gujarat are likely to get foreign funds via PE route. "The talks are underway and we are at different stages of talks with foreign PE funds. The investments are believed to be in the range of Rs 100 crore to Rs 200 crore with PE funds staying invested for a long term period of about four to seven years," said Ashesh Shah, managing director, Trans-Continental Capital Advisors (TCCA) - a Mumbai-based financial advisory firm. However, he declined to reveal names of the companies or the PE funds interested to invest in them.
Some of the leading global PE investors include the Blackstone group, Kohlberg Kravis & Roberts (KKR), Goldman Sachs, the Carlyle group and Bain Capital.
According to Shah, Gujarat is emerging as a latest destination for the foreign PE funds to make investments.
"The infrastructure in the state, law and order situation and entrepreneurship are the key attractions for the foreign PE investors. Additionally, aggressive growth is becoming a latest phenomenon here. So, PE funds find it more promising to invest in Gujarat than any other state," Shah mentioned.
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However, the traditional way of business operations may pose a major challenge for the private equity investors to create a foothold in the state. But the next generation of business entrepreneurs seems to be more professional and adaptable, who would open up to the foreign investments.
TCCA also targets to assist some of the ailing and distressed companies from Gujarat to get PE investments.
So far, TCCA has been instrumental in availing PE investments to the mid-sized companies across India engaged in varied sectors including dairy, micro-irrigation, technical textiles and health care.