India Resurgence Fund (IndiaRF), promoted by Piramal Enterprises Ltd and Bain Capital Credit, on Wednesday said Canada’s largest pension fund manager Canada Pension Plan Investment Board (CPPIB) has invested $225 million in the fund through its wholly-owned subsidiary – CPPIB Credit Investments Inc.
The fund, launched in 2016, looks to invest in distressed assets in the country by purchasing existing debt and equity securities through bankruptcy courts or directly from lenders, or through newly issued securities. It, then, takes control of the turnaround of such assets through recapitalization and operational improvements.
The fund of Bain and Piramal was launched with an initial commitment of $100 million, each, from both parties.
“Our investment in IndiaRF represents an increase in our credit commitments in India, targeting attractive risk-adjusted returns in the sizeable Indian distressed credit space,” said John Graham, senior managing director and global head of credit investments at CPPIB. “Strong partnerships are at the core of how we invest – a strong local operator with active oversight from a trusted global partner will allow us to further increase our investments in India for the long term.”
In 2018, World Bank arm International Finance Corp (IFC) came in as the anchor investor with a commitment of $100 million.
The fund has also raised capital from other international high-net-worth investors and family offices through the current round.
“Setting up of independent judicial machinery has led to efficient resolution of these assets and helped preserve the value of many enterprises. Effective resolution would release capital for banks to fund new capital asset formation, which would in turn fuel future economic growth for the country,” said Ajay Piramal, chairman of Piramal Group.
Last November, IndiaRF had invested $156 million in Archean Chemical Industries. In April, it announced its second investment of $144 million in Panacea Biotec, a pharmaceutical biotechnology firm.
This is CPPIB’s second investment in a Piramal investment platform.
In May, Piramal had signed an agreement with CPPIB to co-sponsor India’s first renewable energy-focused infrastructure investment trust (InvIT), which will have an initial targeted corpus of up to $600 million with an option to scale up further. CPPIB and Piramal will initially allocate $360 million and $90 million respectively to the corpus.
Source: Mint