* Plans to offer capital to struggling Indian companies from
$2 bln special fund
* Plans a global infrastructure fund of a "couple of
* "Tough" to buy controlling stakes in emerging-market
MUMBAI, Feb 20 Global private equity firm KKR &
Co LP plans to offer funding to struggling companies in
India where rising bad loans has constrained bank lending and
low demand has ruled out share sales for many small and
KKR, whose primary activity involves buying businesses using
borrowed money, also intends to invest in India from a planned
global infrastructure fund which could amount to a "couple of
billion" dollars, KKR co-founder Henry Kravis told reporters on
Thursday in India's financial capital of Mumbai.
Asia's third-largest economy is growing at its slowest pace
in a decade, reducing the pace of corporate earnings growth and
making it difficult for companies to raise money.
"A lot of mid-sized and smaller companies today have found
that they can't get capital," Kravis said. "We can provide some
capital to help them out."
KKR, which last year raised $6 billion for the biggest-ever
Asia-focused fund, is considering approaching Indian companies
struggling to revive their businesses with its $2 billion
special situation global credit fund, Kravis said.
Kravis' comments come after India's central bank last month
said it would encourage private equity firms to "play an active
role" in the stressed assets market to help reduce banks' bad
KKR, like peers Apollo Global Management and Olympus
Capital, has been lending to non-stressed Indian companies for
the past few years.
KKR's lending clients have included insurance-to-hospitals
group Max India Ltd, the founders of Apollo Hospitals
Enterprise Ltd, and the diversified Avantha Group.
"Structured financing is already a larger opportunity for PE
funds than originally anticipated," Sanjeev Krishan, a practice
head at consultancy PricewaterhouseCoopers, wrote in a recent
"Interest rates in India continue to remain high, and as
bank balance sheets come under greater scrutiny, carrying out
greater diligence when disbursing money, it opens an opportunity
for PE funds as well."
Analysts say lending not only generates stable income for
private equity firms, but also opens doors to future buyout
KKR, which last year bought a controlling stake in India's
Alliance Tire Group from Warburg Pincus LLC, does not
see too many Indian buyout opportunities due to the prevalence
of family-owned business structures and families' aversion to
"To do 100 percent private equity transactions in emerging
markets is really tough," Kravis said. "It's particularly hard
here... It's so rare that all of a sudden a family wakes up and
says, 'I will sell my business'."
The value of buyout transactions by PE firms in India,
however, jumped nearly three times to $2.1 billion last year
from 2012, helped by large deals including Baring Private
Equity's $420 million takeover of IT firm Hexaware Technologies
Ltd, according to industry tracker VCCEdge.