MUMBAI: Uncertainty surrounding financial services amid concerns over post-Covid losses and recent volatility in global financial markets have dissipated, prompting renewed investor interest in the broader financial sector, said a top executive at the private equity firm Warburg Pincus.
MUMBAI: Uncertainty surrounding financial services amid concerns over post-Covid losses and recent volatility in global financial markets have dissipated, prompting renewed investor interest in the broader financial sector, said a top executive at the private equity firm Warburg Pincus.
“There have been different types of uncertainties over the last 12 to 24 months,” Warburg Pincus chief executive Narendra Ostawal said in an interview on Monday. “There was a time when people were a little afraid of what Covid could do to loan losses. Over the past 12 months, there has been a degree of volatility in the global financial system in the US. We are now at a point where these uncertainties have had an impact in one way or another, which is why we are posting a “Resurgence of (investor) activity in this space” Ostawal was referring to concerns about possible contagion from the recent collapse of Silicon Valley Bank and the turbulence at Credit Suisse given the general volatility in the banking segment.
“There have been different types of uncertainties over the last 12 to 24 months,” Warburg Pincus chief executive Narendra Ostawal said in an interview on Monday. “There was a time when people were a little afraid of what Covid could do to loan losses. Over the past 12 months, there has been a degree of volatility in the global financial system in the US. We are now at a point where these uncertainties have had an impact in one way or another, which is why we are posting a “Resurgence of (investor) activity in this space” Ostawal was referring to concerns about possible contagion from the recent collapse of Silicon Valley Bank and the turbulence at Credit Suisse given the general volatility in the banking segment.
The revival of private equity interest is playing out more in India, where companies have seen growth, Ostawal said. “The company is actually doing well. The asset quality metrics in this segment also look stable.”
The revival of private equity interest is playing out more in India, where companies have seen growth, Ostawal said. “The company is actually doing well. The asset quality metrics in this segment also look stable.”
On Monday, Warburg Pincus announced that it has completed a $250 million transaction to acquire over 90% of Vistaar Finance, a non-bank finance company (NBFC) focused on micro, small and medium-sized businesses .
On Monday, Warburg Pincus announced that it has completed a $250 million transaction to acquire over 90% of Vistaar Finance, a non-bank finance company (NBFC) focused on micro, small and medium-sized businesses .
The other major private equity deal pending in the NBFC segment involves Credila Financial Services, the education finance arm of HDFC Ltd, which is currently in the pipeline. A consortium of Baring EQT and Chrys Capital and Faering Capital has emerged as the front runners to acquire Credila, Mint reported Monday.
The other major private equity deal pending in the NBFC segment involves Credila Financial Services, the education finance arm of HDFC Ltd, which is currently in the pipeline. A consortium of Baring EQT and Chrys Capital and Faering Capital has emerged as the front runners to acquire Credila, Mint reported Monday.
Ostawal declined to comment specifically on the transaction, but noted that the entire segment was booming. Warburg Pincus has had an investment in rival student loan servicer Avanse Financial Services since 2019. In January of this year, Kedaara Capital invested US$98 million in Avanse.
Ostawal declined to comment specifically on the transaction, but noted that the entire segment was booming. Warburg Pincus has had an investment in rival student loan servicer Avanse Financial Services since 2019. In January of this year, Kedaara Capital invested US$98 million in Avanse.
“The education loan business is attractive and we invested in this area about four years ago. “A lot of that has to do with the secular trends that we’re seeing from a demographic perspective — with people going abroad (to study),” Ostawal said.
“The education loan business is attractive and we invested in this area about four years ago. “A lot of that has to do with the secular trends that we’re seeing from a demographic perspective — with people going abroad (to study),” Ostawal said.
Multi-product NBFCs should attract more interest, he noted. Warburg Pincus’ other financial services investments include Fusion Micro Finance, which went public last year, and real estate lender Home First Finance. It also owns a stake in IDFC First Bank.
Multi-product NBFCs should attract more interest, he noted. Warburg Pincus’ other financial services investments include Fusion Micro Finance, which went public last year, and real estate lender Home First Finance. It also owns a stake in IDFC First Bank.
Recent moves by Indian regulators to open up insurance and mutual fund segments would also attract investor interest, Ostawal said. Last October, India’s Insurance Regulatory and Development Agency (Irdai) made it easier for private equity firms to act as promoters of insurance companies. In March 2023, the Securities and Exchange Board of India (Sebi), market regulator, announced that it would allow private equity firms to act as sponsors of mutual funds.
Recent moves by Indian regulators to open up insurance and mutual fund segments would also attract investor interest, Ostawal said. Last October, India’s Insurance Regulatory and Development Agency (Irdai) made it easier for private equity firms to act as promoters of insurance companies. In March 2023, the Securities and Exchange Board of India (Sebi), market regulator, announced that it would allow private equity firms to act as sponsors of mutual funds.
These regulatory moves would result in private equity interest expanding beyond banks and non-bank financial services, he said.
These regulatory moves would result in private equity interest expanding beyond banks and non-bank financial services, he said.
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