HSBC set for PE play in India

The billion dollar private equity club is growing. Notwithstanding the presence of pure play PE majors, banks are also raising $1 billion India-focused funds through their PE arms.

Hongkong and Shanghai Banking Corporation (HSBC), which has global assets running into trillions of dollars, is the latest one to come into India with an estimated $1.1 billion for growth stage companies and real estate ventures.

According to company officials, HSBC India has recently raised a $500 million realty fund, which will run parallel to the growth fund investments in the range of $600 million.

Naina Lal Kidwai, group general manager and country head, HSBC India, said, "At the Asia PE fund level, of which India is an arm, we have recently closed a $1.5 billion fund. According to our estimates, 40 per cent of that is expected to be committed to India."

HSBC, which has been a low-key player in the Indian PE space, is pressing on the pedal as global money is rushing into India to take advantage of the high-growth Indian companies who are delivering good results year after year.

Global blue chip names such as Blackstone, Texas Pacific Group, Kohlberg Kravis Roberts & Co, George Soros Foundation are all pumping iron to take a bite into this growing market.

"Compared to the pure play PE giants, yes we have been not been much in action so far in India," admitted Kidwai.

HSBC is stepping into the realty front at a time when global fund flows to this sector is under scrutiny by the regulators. According to independent estimates, the real estate sector has absorbed close to $3 billion of the total $10 billion PE invested funds.

"HSBC will be jostling with the likes of JP Morgan, Citigroup Venture Capital, Temasek and others in this highly competitive market, which is witnessing a tremendous boom given the rising aspirations of Indian citizens and strong growth fundamentals of the corporate India," noted an industry analyst.

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In race to lend $500 mn to Wipro

HSBC India head has confirmed that they are in the race to jointly lend $500 million to Wipro, India's third largest software services company.

Naina Lal Kidwai, group general manager and country head, HSBC India, said that Wipro has intent to borrow up to $500 million and they are in active discussions with them. According to industry sources, HSBC and Citibank are expected to clinch the deal.