Bharti Enterprises and French insurance major AXA are planning to launch a private equity (PE) fund in India. Currently, both companies are working out the fine print of the JV. A
source in Bharti Enterprises (the holding company for all Bharti businesses like telecom, retail and financial services) confirmed the development, but said it was too early to spell out the details such as the shareholding pattern of the two partners in the JV and the amount the promoters would put into this PE fund.
Once operational, this will take the number of JVs between Bharti and Axa to five. At present, Bharti and AXA have a 74:26 JV for life insurance and a similar JV for general insurance. Both companies have also jointly launched an asset management company (AMC) to tap the mutual fund segment in India with AXA holding a 75% stake. The two companies have also agreed to set up a real estate fund, but they are yet to formalise the joint venture agreement for the same.
While the life insurance JV has been operational since December 06, general insurance and AMC have been functional since July 2008.
ET had reported about Bharti Enterprises examining the possibility of venturing into the PE space along with a strategic partner in February 2007. The report had then said that Bharti Enterprises, which had surplus cash, was looking at new investment opportunities to deploy these funds in an optimal manner.
Bharti recently rejiged its top deck to focus on emerging businesses and appointed Akhil Gupta as deputy group CEO & MD of Bharti Enterprises to spearhead the group’s emerging businesses. In his new role, Mr Gupta is leading the financial services arm of the company which includes all Bharti-Axa joint ventures. Sources said that Mr Gupta will play a key role in the PE joint venture also.
Bharti Airtel chairman and group CEO Sunil Mittal during an interaction with the media on Monday said that he expected the non-telecom business to contribute 50% to the company’s revenues in the next five years. Currently, telecom accounts for over 80% of the group’s revenues.
Source: Economic Times