Carlyle Group LP acquired a 9 percent stake in Mumbai-based brokerage India Infoline Ltd. (IIFL), the second investment by its Asian buyout fund in the nation.
Carlyle, which bought the stake in the stock market, will be invited to join India Infoline’s board, the Washington-based buyout firm said in a statement today. It didn’t disclose the value of the stake. Based on India Infoline’s market capitalization of 20.6 billion rupees ($417 million), a nine percent stake is worth 1.85 billion rupees, according to data compiled by Bloomberg.
Carlyle and rivals including Apollo Global Management LLC are stepping up investments in India as stock offerings dry up and interest rates rise, making Indian companies more willing to accept private-equity financing. Private-equity firms have announced $5.54 billion of deals in the country this year, up from $3.79 billion for all of 2010, Bloomberg data show.
India Infoline doesn’t have immediate plans to issue shares to Carlyle, though its finance business may need capital in the future, Nirmal Jain, chairman of the Mumbai based brokerage said in a telephone interview from Mumbai.
“We will assess our requirements and reach out to them if they are willing and the terms are agreeable,” he said. “There are no discussions yet.”
The investment in India Infoline was made by Carlyle Mauritius Investment Advisors Ltd., a part of Carlyle Asia Partners whose first major investment in India was a 2007 acquisition of a $650 million stake in home-loans provider Housing Development Finance Corp., according to Bloomberg data.
“We think the current environment presents good opportunities to work with good managements and companies for investing in India,” said Devinjit Singh, managing director of Carlyle Group’s Indian unit.
CLSA Ltd.’s former India country head H. Nemkumar, sales director Bharat Parajia and two other executives joined India Infoline in 2007, lured by signing bonuses of as much as 440 million rupees and the option to buy shares at below-market prices. India Infoline shares have dropped 13 percent this year.
Carlyle sees an Indian buyout market emerging in the “next couple of years,” though in the “near term,” it will confine itself to mostly minority investments, Singh said.
Carlyle, the second-largest manager of private-equity funds, registered for an initial public offering of $100 million by next year, the company said in a Sept. 6 filing with the U.S. Securities and Exchange Commission. That figure is a placeholder to calculate filing fees; the final amount may vary.
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