Standard Chartered PE Nears Two Deals

MUMBAI (Reuters) – Standard Chartered Private Equity, the direct investment arm of the British bank, is close to investing in two Indian companies and sees opportunities in the country’s export service sector as Western firms cut costs, a top official said.

Nainesh Jaisingh, head of StanChart’s (STAN.L) (2888.HK) private equity business in Asia’s No. 3 economy, said deal flow in India was picking up but its consumer-related companies were not cheap after a stock market rally that has seen the benchmark index .BSESN rise by about three-quarters this year.

“We have very good deal flow right now. We are open for business and we have a very active pipeline,” Jaisingh told Reuters in an interview at Standard Chartered’s historic office building in south Mumbai.

“We are currently in two situations, which are very advanced, and a third one, which is developing,” he said, declining to name the companies.

Standard Chartered Private Equity (SCPE) manages $1.5 billion in assets in Asia. Since starting in India in 2004, it has put $400 million into 10 firms such as engineer Punj Lloyd (PUJL.BO) and banking software maker Iflex, which was bought by Oracle (ORCL.O)

“What has helped us is that our institution has done very well in the crisis and our business has got good support, which hasn’t been wavering,” he said, adding the private equity unit draws money from the bank and does not run third-party funds.

Jaisingh said SCPE remained interested in India’s infrastructure sector and investment opportunities had resulted from the global financial crisis.

“I actually think the export story is a place were we should look at very carefully, because domestic consumption is an obvious story, therefore it gets prices,” he said.

“My job is to buy stuff when everybody thinks it is not so hot and if it has a future,” said Jaisingh, who joined London-based StanChart’s Singapore office in 2000.

Jaisingh noted his team is especially interested in India’s “skills export” business, which was primarily outsourcing and technology services in IT, pharmaceuticals and auto components.

“When you look at what’s happening in the world, yes, say the U.S. slows down Europe slows down, initially the big topline falls away,” he said.

“What is the next step? Cost controls. And that will have a big push factor into this part of the world,” Jaisingh added. “I think the whole story of skills export out of India can come back very strong over the next couple of years.”

By Narayanan Somasundaram and George Chen
(Editing by Tony Munroe and John Mair)