(Reuters) – U.S. private equity firm General Atlantic said on Friday the sharp depreciation of the Indian rupee and a stock market decline have created a good entry point for private equity investments in the South Asian nation.
“I think it is a very interesting entry point for India right now,” CEO Bill Ford told reporters in Singapore, where the firm on Friday formally opened a new office. “We are biased towards capital there.”
“The reason is the currency has moved up into the low 50s and for a dollar-based investor I think it is a very interesting moment to put capital right there,” he added.
A combination of slowing growth and widening fiscal and current account deficits is weighing on the Indian rupee.
The rupee was the worst performer among Asian currencies last year, losing close to 16 percent against the dollar.
GA, which manages $17 billion in capital and owns a stake in Facebook, has invested $1 billion in companies in India over the past nine years, including stakes in IndusInd Bank and Infotech Enterprises Ltd (INFE.NS), according to its website (www.generalatlantic.com).
Ford said the firm has made 2.5 times on its capital in Indian investments with an average holding period of four years.
Abhay Havaldar, who set up GA’s India office in 2002 and has moved to Singapore recently, said the firm has 12 investments in India. The firm has also exited from four companies.
In China, GA last year invested in the initial public offering of China’s hypermart firm Sun Art (6808.HK), which raised $1.1 billion in a Hong Kong listing.
Ford said Asia accounts for about a quarter of its investments and should grow to a third over the medium-term.
He said fundamentals are intact for growth in China, India and Southeast Asia, while challenging public markets is creating room for private capital.
“This one should be a very active year,” Ford said.
(Reporting by Saeed Azhar; Editing by Muralikumar Anantharaman)