• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Madhumathi D.S.

Bangalore , Oct. 12

PRIVATE equity fund GW Capital plans to add two to four companies to its portfolio in the coming few months.

It is currently on a familiarisation trip with half a dozen candidate companies before zeroing in on some of them for parking the funds, according to Mr Vishal Nevatia, CEO of GW Capital.

"We have shortlisted 5-6 medium sized companies and may make it about four. (The investments may start happening) hopefully in the next six months, as we have already been working them for some time now," Mr Nevatia, who heads the Mumbai-based fund company, told Business Line.

Up to 60 per cent of the Rs 150-crore corpus, the India Value Fund, that it raised in 2000 - at that time the largest private Indian equity fund - has been placed so far in four companies. Having invested in Biocon India, CRM player Epicenter Technologies, in healthcare provider Quality Care of Hyderabad and movie distribution and multiplex company Shringar Films, GW Capital is yet to get into its two remaining focus areas, retailing and supply chain management. "We hope to do something in these areas shortly," Mr Nevatia said.

Apart from biotechnology, healthcare and pharmaceuticals, he said, "We are pretty open (to other sectors) and if we get a good opportunity, we can invest anywhere.

"Another area we are looking at is restructuring. Now that financial institutions are ready to restructure NPAs, there are possibilities of making some of the sick companies viable with the right kind of management or financial support. These could be both listed and unlisted. In about 5-10 years, a lot of this work will happen as you will have so many sick units which need to be turned around."

GW Capital is sponsored by former GE Capital CEO Gary Wendt, HDFC, IDBI, and Ambit Corporate Finance. It typically invests $3-5 million or picks a stake of 20-25 per cent in mid-sized and growing companies.

Mr Nevatia said the South has been an attractive proposition for funding biotech, pharma, healthcare and retailing businesses and the West for showbiz. GW's USP, he said, was in its management support for building the portfolio company's business and helping it to move up to the big league.

It will raise its second fund, which would be much larger than IVF, from domestic investors and internationally after fully deploying the IVF. For now, the focus would be to complete the remaining investments of the IVF, while it would also look out for exit opportunities as they arose.

Finding good investors for dedicated India funds, according to Mr Nevatia, can be daunting as VC and equity funding began in India when the dotcoms were going bust. The outlook is changing and the 20-odd active funds in the country are slowly creating a track record to show global investors that it pays to put their money in India.

Though India is a fairly good destination and the situation is steadying after three years of turmoil, there are no India-dedicated funds. Allocations are from Asian or global funds. The important thing for private equity companies, according Mr Nevatia, is to correct the aberration that came with dotcoms. And when that is done, he is optimistic that the difference in the private equity scene should be felt over the next 3-4 years.

Article E-Mail :: Comment :: Syndication

Stories in this Section
25 in race for E&Y award for Entrepreneur of the Year

Copyright © 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line