Kotak Mahindra Bank Ltd., the former partner of Goldman Sachs Group Inc. in India, plans to raise about $1.2 billion for two funds to invest in the world's second- fastest-growing major economy.
Kotak will seek $1 billion to invest in infrastructure and will add $200 million from overseas investors to a third private equity fund that closed last month, Nitin Deshmukh, chief executive officer at Kotak Investment Advisors Ltd., said in an interview in Mumbai.
3i Group Plc, Deutsche Bank AG and Morgan Stanley are increasing alternative investments in India, where private equity firms raised seven times more than China in the first quarter. Kotak plans to have $2.5 billion in assets by the end of March by adding to holdings including Multi Commodity Exchange of India Ltd. and the National Stock Exchange Ltd.
Kotak has made investments through two private equity funds, the India Growth Fund, started in 2005 with $160 million of assets, and the Kotak India Venture Fund I, started last year, that manages $65 million.
Deshmukh and his two partners have screened 1,200 private equity proposals since starting Kotak's private equity arm in 2005, he said. The group has invested in just 15, with Kotak owning a majority stake in three.
Holdings include Metahelix LifeSciences Ltd., an agri- biotech company that develops technologies to improve crops using hybrid seeds. The company is expected to be the first Indian company to commercialize genetically modified rice, he said.
Share Sale
Kotak last year invested in the Multi Commodity Exchange, the nation's biggest commodity bourse, with investors including Citigroup Inc. and Merrill Lynch & Co. The bourse, which has filed share sale documents with the stock regulator, is expected to complete the sale by the end of March, Deshmukh said.
The private equity unit of Kotak closed its third fund last month, raising $437 million. Kotak also runs a real estate fund with about $800 million.
3i Group, Europe's biggest publicly traded private equity firm raised $1.2 billion last month for India, where infrastructure projects are estimated by the government to reach $450 billion by 2012.
Morgan Stanley, the second-biggest U.S. securities firm, said in April it plans to set up a private equity unit in India, while Deutsche Bank's RREEF unit, the world's largest alternative investment manager, plans to invest more than $1 billion over three years in real estate and infrastructure.
Source: Bloomberg