Canada Pension Plan Investment Board has committed $225 million (about Rs 1,600 crore) to a distressed assets buyout platform set up by Piramal Enterprises Ltd and Bain Capital Credit.
CPPIB joins International Finance Corporation as an investor in the India Resurgence Fund (IndiaRF). The World Bank’s private-sector investment arm had committed $100 million to the fund last year while Bain and Piramal have each put in an equal amount.
IndiaRF said it has also raised capital from other international investors and family offices in this round of funding. It didn't disclose the amount or the name of these investors.
John Graham, senior managing director and global head of credit investments at CPPIB, said in a statement that the Canadian fund’s investment in IndiaRF represents an increase in its credit commitments in India, “targeting attractive risk-adjusted returns in the sizeable Indian distressed credit space”.
Separately, IFC South Asia director Mengitsu Alemayehu said the fund would have a positive impact on the non-performing loan segment, especially in terms of revival and turnarounds. “We believe that helping to address India’s NPL problem will have a very significant positive spillover effect in the economy, including saving and creating jobs,” Alemayehu said.
The announcement comes days after VCCircle first reported last week that CPPIB was set to team up with the India Resurgence Fund.
The fund was set up in 2016 with an initial target corpus of $1 billion. In November last year, the fund invested $156 million, via debt and equity instruments, in the marine chemicals business of Chennai-based Archean Group. In April this year, the fund had announced an investment of up to $144 million in debt-laden Panacea Biotec Ltd through a one-time settlement with the New Delhi-based company’s lenders.
Meanwhile, the commitment to IndiaRF marks CPPIB’s second attempt at stressed assets investing. In 2016, it announced a joint venture with the Kotak Mahindra Group for stressed assets, but later gave up after finding valuations expensive. Earlier this month, the firm said valuations in India had turned favourable in certain sectors and asset classes including credit and infrastructure.
The pension fund is one of the most aggressive private equity-style investors in India over the last five years, with the institution placing a special emphasis on the infrastructure and financial services sectors.
Since January, CPPIB has committed around $1 billion in fresh investments in the country, with deals related to SBI Life Insurance Co. Ltd, logistics-technology player Delhivery Pvt. Ltd, green energy firm ReNew Power Ltd, and the National Investment and Infrastructure Fund (NIIF) Master Fund.
