Abraaj Capital eyes India for investment, expansion

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Omar Lodhi, Senior Partner, Abraaj Capital presentation to the investor community. Photo - Abraaj.com

Abraaj Capital, the Middle East’s largest private equity firm, has announced plans to expand further in India. Dubai-based Abraaj joined hands with Sabre Capital, a leading private equity firm in India, to form Sabre Abraaj Capital in 2006. Both Abraaj Capital and Sabre Capital have equal partnership in the joint venture. Sabre Abraaj Capital launched a US$250 million fund that invested in both listed and unlisted Indian companies.

“We are in the process of completing investments – two or three investments,” founder and group chief executive Arif Naqvi told Reuters in an interview while adding that in the near future India would be a focus region for investment.

“We have about six investments in India and we are looking to ramp that up massively. We have 10 people on the ground, which is 10 more than we had last year. India, to me, is a far more exciting market than China,” he added. Investment observers believe some Western private equity firms have exited from the Indian market creating new buying opportunities for Middle Eastern companies.

Dubai-based Abraaj, founded a decade ago, has raised $7 billion since its inception. It has stakes in 35 firms across the region including Orascom Construction, budget carrier Air Arabia, supermarket Spinneys and education group GEMS.

Last year it acquired Aureos Capital, an investment firm that specialises in emerging markets. It also invested $125 million in a Moroccan insurance holding firm and tied-up with TransAtlantic Petroleum to buy the company’s oilfield services unit.

Market Ripe for deal-making

Naqvi insisted that the private sector would continue to be the engine of economic development, and there is a need for further investment. Abraaj plans to exit some ventures in the next 18 months. It has already sold its stake in Turkish group Acibadem to Integrated Healthcare Holdings (IHH), a healthcare unit of Malaysian firm Khazanah Nasional, for a $1.68 billion late last year. It has also announced the first closure of Palestine Growth Capital Fund that aims to provide private equity growth capital investments and management support to high growth small and mid-cap companies (SMCs) in Occupied Palestine.

Abraaj Capital is also scouting for possible acquisitions in natural-resource companies in Indonesia to capitalise on the country’s accelerating economy. Omar K. Lodhi, chief executive officer of Abraaj Capital Asia, said Indonesia, given its demographic condition, young population and rising purchasing power, is a potential market for the firm. He said the firm plans to invest in tin mines and agriculture in the country.

Sources: Abraaj, Reuters, ameinfo, lankabusinessonline.com

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