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“India Remains A Compelling Investment Destination"

Vishal Mahadevia & Niten Malhan, managing directors at Warburg Pincus, speak with BW’s Munnish Puri about their keen investment focus on India

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Vishal Mahadevia & Niten Malhan, managing directors at Warburg Pincus, speak with BW’s Munnish Puri about their keen investment focus on India

What is the key focus of the private equity investment philosophy of Warburg Pincus in India?
Niten Malhan: Warburg Pincus has been a growth investor in India over a long period and we have navigated through business cycles, seeing both good and not-so-good times. We have invested consistently through these cycles with a clear strategy of looking to partner with exceptional entrepreneurs and management teams to help build sustainable businesses. We also recently celebrated our 20th anniversary of investing in India. We have benefitted from being able to witness the private industry grow.

What are the key factors driving higher private equity investing by Warburg Pincus in India?
Vishal Mahadevia: India has been a very significant investment destination for Warburg Pincus. The firm has invested over $3.8 billion in India over the last 20 years across diverse sectors. India remains a compelling investment destination for us for several reasons — a diverse base of quality entrepreneurial talent, robust capital markets, a growing consumer-led economy and strong and stable institutions.

A lot has changed since Warburg Pincus first came to India in the early 90s, when capital was extremely scarce. Today, capital is more easily available for distinctive entrepreneurs and companies. Warburg Pincus provides ‘patient capital’ and a ‘line of equity’ to enable entrepreneurs to pursue their dreams, by providing access to capital at various stages of a business’s development to support its growth. We are involved in creating several platforms where we partner with the entrepreneur. It is worth noting that Warburg Pincus provides a lot more to entrepreneurs than just capital — our portfolio companies can access our global network along with significant strategic, organisational, M&A and operational support and know-how.

How has your firm performed in India over the recent years?
Malhan: As we mentioned, India is one of the key regions we invest in, and it has been a successful journey for us. Some of our most successful investments in this region include Bharti, Alliance Tires, Havells, Nicholas Piramal, Max, Kotak, WNS, to name a few.

Our investments in India have been very diverse, ranging from retail, logistics, banking, infrastructure, healthcare, financial services and inclusion, to consumer products and services as well as telecommunications and Internet and technology. This broad spectrum is a reflection of the firm as a whole. Over time our strategy has remained consistent — finding outstanding management teams and entrepreneurs to build sustainable businesses.

Broadly speaking, what are your investment themes?
Mahadevia: Our investment themes are:

- Continued financial inclusion and penetration of financial products, such as our investments in Capital First and AU Financiers.
- Shift from unorganised to organised/branded products and services, such as our investments
in PVR, Kalyan, Biba and LemonTree.
- Emergence of the digital economy, such as our investments in Quikr and CarTrade.
- Building out of enabling infrastructure such as our investments in Gangavaram, Piramal Realty, Ecom Express, Rivigo, Stellar Logistics, Embassy Warehousing.
- Leveraging India cost and skill advantage such as our investments in Laurus Labs and Capillary.