TPG sees chance in $131 bil­lion In­dia dis­tressed as­sets

The Pak Banker - - 6BUSINESS -

Jim Coul­ter, the co-founder and cochief ex­ec­u­tive of­fi­cer of al­ter­na­tive as­set man­ager TPG, is so ex­cited about In­dia that he brought 65 of his in­vestors to the na­tion to meet pol­icy mak­ers and com­pa­nies this week.

TPG may write "bil­lion- dol­lar checks" in In­dia, Coul­ter said in a phone in­ter­view from New Delhi on Wed­nes­day. The pri­vate equity firm has been on the side­lines for a long time, wait­ing for op­por­tu­ni­ties to in­vest in non-per­form­ing as­sets in the coun­try, ac­cord­ing to TPG Cap­i­tal's In­dia head, Puneet Bha­tia.

"Our sin­gle fo­cus is in In­dia right now," Coul­ter said. "We have the dry pow­der, the in­cli­na­tion and we have the aspi- ra­tion that this would be the core mar­ket for us as this econ­omy grows."

Buy­ers in­clud­ing TPG and KKR & Co. are flock­ing to In­dia, lured by prospects of buy­ing as­sets at deep dis­counts in a na­tion that's fore­cast to ex­pand 7.5 per­cent in the year start­ing April even as growth slows in China. A surge in prob­lem loans prompted Prime Min­is­ter Naren­dra Modi's govern­ment to ease rules for pri­vate equity firms to in­vest in stressed as­sets.

In In­dia, "we would like to find a way to in­vest a bil­lion a year for the next three years if we can find the right in­vest­ments," Coul­ter said. TPG has in­vested $1.5 bil­lion in In­dia so far, he said.

Prob­lem loans, which in­clude bad debt, re­struc­tured loans and writ­ten-off as­sets, rose to $131 bil­lion as of Sept. 30, Re­serve Bank of In­dia data show. That's equal to 14.1 per­cent of to­tal loans, the high­est pro­por­tion in at least 15 years. An­other 4 per­cent might sour when an au­dit driven by the cen­tral bank fin­ishes March 31, ac­cord­ing to Credit Suisse Group AG.

"It now strikes as the time when the ducks are lined," Bha­tia said by phone Wed­nes­day. "Dis­tressed op­por­tu­ni­ties in In­dia are more suited for pri­vate equity, as you have to own the en­tire cap­i­tal struc­ture and need to make the man­age­ment changes." TPG's in­vestors vis­it­ing In­dia this week man­age more than $3 tril­lion of cap­i­tal, ac­cord­ing to Coul­ter. This is the first time the pri­vate equity firm brought its in­vestors to the na­tion.

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