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India Inc. is expected to make massive investments through both organic and inorganic growth strategies over the next 5 years. The size of the opportunity is immense driven by the country’s investment requirement of greater than US$ 2 trillion over the next 5 years, especially in infrastructure and expected M&A activity of US$ 200 billion. At the same time the primary sources of finance are expected to see an increase in distress assets to more than US$ 50 billion despite growth in broader economy due to micro factors associated with ineffective management and over extension of resources.
The above requirements are expected to result in diverse opportunities for structured investments as key stakeholders seek to optimise capital structures and enhance returns. This will present the fund with opportunities to take advantage of event based value arbitrage that arise due to a mismatch in cash flows or imbalance in capital structures driven by rapid growth, mergers and acquisitions, business turnarounds and family settlements.
The fund provides the bank with an opportunity to earn higher returns available through active identification and management of event based opportunities.
FOCUS AREAS
The fund would focus on infrastructure and infrastructure adjunct sectors and opportunities arising from
· Capital structure optimisation
· Business turnaround subsequent to periods of mismatch in cash flows or imbalanced capital structures
· Acquisitions – buy outs and stake enhancements
· Family or JV re-alignments
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