February 2008
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AIG arm to invest $20m in Uniparts

AIG Global Investments, the private equity arm of American International Group (AIG), is putting in close to $20 million in Uniparts, a Rs 500-crore company that specialises in making machinery for the construction and agricultural equipment sector, a niche segment within the auto ancillary sector. This is AIG’s third investment in the last three months and second in the auto sector with Kinetic Engineering being the other investment. Mr Ashish Kumar of AIG will sit on the board of Uniparts. Paramjit Soni, founder and managing director of Uniparts, confirmed about the deal to ET. AIG’s investment in the sector is a bit counter-intuitive because the entire auto component sector has taken a beating over the last year. A slowdown in consumer demand (especially trucks) has affected the domestic market while the rising rupee has hit the exports market. But Uniparts, say industry experts, operates in a niche that makes it different and more profitable. […]

PE funds fail to get their exit timing right

Markets may have crashed, justifying some recent high-profile exits by leading private equity players from Indian companies, but their pullouts may have cost them a few billions, at least notionally. Some number crunching by ET shows that although global PE majors like Warburg Pincus, Baring, ChrysCap and Citigroup Venture Capital have made big profits from their Indian investments, they would have pocketed a few billions more had they held on to their shares for a little bit more. And this is exclusive of the dividend money which would have accrued to them while they were holding the stock. Given the spectacular bull run over the last couple of years in the Indian stock markets, the value of the listed firms rocketed sky high. While some PE funds timed the market right by exiting at a price with a fair degree of profits in Actis-Punjab Tractors, IDFC Private Equity-Hotel Leela Venture, many others made huge losses from their early exits, notionally speaking. Take Warburg Pincus’ investments in Bharti Airtel. This has been the most valuable exit by any PE firm in the country till date. The PE firm had invested Rs 1,300 crore in 1999 in the telecommunication company. Subsequently, through various partial exits, it made a phenomenal Rs 8,496 crore, or $1.9 billion, at the time of the final exit, taking home more than six times its original investment. […]