Värde Partners to invest $1 bn in India over 12 mths

“Over the next 12 months, across 6-8 transactions, we are looking at anywhere around $800 million to a billion dollars in terms of pipeline, where we see some real transactions, which have progressed well or are at stages of progression,” Sandeep Chandak, managing director at Värde Partners, said in an interview. He said Värde is looking to invest $100-200 million per deal.

According to Chandak, while the investments will be largely sector agnostic, it will consider a variety of sectors where companies are strong, “from real estate to infrastructure to industrials. I would also include tech companies that have a business model and are more evolved late-stage tech companies at the pre-IPO stage. There are also some opportunities there,” he said without elaborating.

The private investor’s most recent deals include buying a 15% stake for ₹933 crore in Anil Ambani group’s debt-laden Reliance Power Ltd. Last year, Värde pumped in ₹550 crore in Reliance Infrastructure, part of the same group.

In India, over the last three to four years, Värde has deployed more than $3 billion across more than 20 transactions.

Since its inception in 1993, the firm has invested $90 billion and manages more than $13 billion in assets across North America, Europe, and Asia Pacific.

India makes up about 40% of Värde’s investments in the Asia-Pacific market. The investor also has a strategic partnership with Aditya Birla Capital in India as it actively acquires debt through its asset reconstruction company (ARC) arm. These include transactions with GMR Airports and GMR Infrastructure and buying Punjab National Bank’s debt exposure to KSK Mahanadi Power.

The earlier stage of transactions in India were special situations, and in the last couple of years, the mix of performing credit to special situations is split equally, Chandak said, suggesting the firm could close more credit deals.

“In India today, private credit will probably be a third to half of our focus area, and the remaining two-thirds to half would be special situations deals,” said Chandak.

In the early days, especially since the IBC (Insolvency and Bankruptcy Code) law was passed, the firm closed several secondary transactions and private credit and special situations deals, including one-time settlements and debt to tech companies.In December 2019, Värde was part of a group of investors that led one of the biggest OTS transactions in India worth $922 million for distressed power producer RattanIndia Power Ltd.

“As an alternative capital provider, we should be flexible in terms of how the economy and the country are going and what kind of opportunities the country is providing. India as a country offers a fairly large opportunity on the private credit side. It’s a large economy with strong GDP growth, and you have a limited supply of private credit, which is done in an institutional manner. All of that implies that it will be an attractive market for many, many years to come for someone like Värde,” Chandak said.