IFC makes LP commitment to Bain-Piramal’s $1 bn India Resurgent Fund

By Ranjani Raghavan

  • 27 Mar 2018
Credit: Shah Junaid/VCCircle

International Finance Corporation (IFC), the private sector investment arm of the World Bank, is coming in as a Limited Partner (LP) in India Resurgent Fund, which has a mandate to acquire distressed assets, it said in a disclosure on Monday.

IFC, which has both direct investments and LP interest in private equity and venture funds active in India, said it would commit $100 million (Rs 650 crore) to India Resurgent Fund, which was set up by Bain Capital Credit and Piramal Enterprises in 2016.

Bain Capital Credit is the credit affiliate of private equity firm Bain Capital.

Both sponsors are separately committing $100 million and will raise around $700 million from other sources to square up a $1-billion (Rs 6,500 crore) fund, the IFC disclosure said.

Piramal Enterprises had named Shantanu Nalavadi to lead the partnership with Bain. So far, the entity has not made any investments in this space. However, it is seen as the main bidder for Binani Cement.

Although the lenders to debt-strapped Binani have selected a consortium of Bain-Piramal fund and Dalmia Cement as the lead bidder, UltraTech has challenged the auction and separately emerged as the preferred bidder for the promoters of the cement company.

Several other investors including global pension funds are looking to invest in stressed assets that have become available in power, steel and infrastructure segments.

Separately, Piramal Enterprises has also set up an asset reconstruction company (ARC) with Bain Capital Credit India Investments.

Piramal Enterprises recorded consolidated revenue of around $1 billion in 2015-16. Its Piramal Fund Management division invests in the real estate sector, while the Structured Investment Group provides long-term mezzanine growth capital to capital-intensive businesses. The total funds under management under these businesses are $3.3 billion. The company also has tie-ups with CPPIB and APG Asset Management.

Bain Capital Credit, previously known as Sankaty Advisors, had about $30.4 billion in assets under management as of 31 March 2016. It follows a broad spectrum of credit strategies, including leveraged loans, high-yield bonds, distressed debt, structured products and non-performing loans.

For IFC, this is one of the largest LP commitments for an India-focused fund. In the past, it has bet larger sums in some emerging markets funds of Abraaj Capital and I Squared that has India as a key investment mandate. Among its India-only funds, it has committed $100 million or more in Macquarie-SBI Infrastructure Fund, according to VCCEdge, the data research platform of News Corp VCCircle.

Among its more recent LP commitments in India, it has supported Kedaara Capital's second fund and IndoSpace Logistics Parks' third fund. It has also backed Lighthouse's third India mid-market PE fund, besides supporting IDG Ventures, Stellaris Venture Partners and pi Ventures among the VC funds.