JPMorgan reaps neat money from India portfolio despite a setback

New Delhi, April 30 -- Global financial services firm JPMorgan's asset management arm has pressed the exit button on an Indian portfolio company it picked as part of a venture capital secondaries deal nearly a decade ago.

While the portfolio company had already turned a multi-bagger in a partial exit three years ago, and has failed to live up to expectations thereafter, JPMorgan is spinning above benchmark returns from the bet.

An investment entity under the asset management firm sold a chunk of its shares in autotech venture CarTrade. This comes soon after the investment firm sold some shares early this year.

In total, JPMorgan is estimated to have pulled out around Rs 60-65 crore since January from CarTrade at a multiple of invested capital (MOIC) of around 2.6x.

This is modest over the nine-year holding period but the previous partial exit move in 2021 during the company's IPO has lifted the overall returns.

At that time JPMorgan had spun 6x over a six-year period.

In total it has realised internal rate of return of around 30-32% as per VCCircle estimates. This is far above the 20% benchmark chased by PE-VC firms in India.

To be sure, JPMorgan had not directly invested in CarTrade. It had picked up the stake as part of a larger secondaries deal where it bought American venture capital firm Canaan Partners' India portfolio in 2015.

That overall portfolio secondaries deal was pegged to be worth around $200 million and included other companies as part of the basket.

It is gathered that the imputed value of its stake in CarTrade was around Rs 155 crore. It has already taken out nearly three times what it had invested.

Its remaining stake in the company is worth Rs 186 crore.

CarTrade had gone public with a market cap of around $1 billion. Thereafter, it was hit by an avalanche as global tech valuations tumbled. While many of its internet peers have managed to claw back, it is still trading at less than half the value at which it went public.

It has recovered from the lows of last spring but has a long way to travel before it can reach its previous level. The company also counts other investors such as Temasek, Warburg Pincus and March Venture Capital.

Shares of CarTrade Tech ended Tuesday's session with cuts of 2%, at Rs 714.50 apiece on the Bombay Stock Exchange.

Published by HT Digital Content Services with permission from VC Circle.