New Delhi, Aug. 18 -- Private equity firm Bain Capital has fully exited an India real estate investment it made three years ago, marking its third liquidity move from its local portfolio so far this year and taking its total harvest to more than $500 million.
The PE firm, which generated spectacular returns in a partial exit from Dhoot Transmission Ltd this month via the auto components maker's initial public offering and sold its stake in drugmaker Emcure Pharmaceuticals with below-par returns, has now offloaded its entire ownership interest in Embassy Office Parks REIT.
Bain divested 53.45 million units, or a 5.64% stake, in the real estate investment trust for Rs 2,325.3 crore ($243 million) via open market transactions this week. The sale takes its harvest from India to nearly $520 million this year, after adding the approximately $147 million it mopped up from Dhoot and $130 million from Emcure.
The PE firm had first invested in the REIT in March 2023, picking up 37.05 million units for Rs 1,109 crore. It bought another 34.22 million units in December 2023 for Rs 1,081.4 crore, taking its total investment to Rs 2,190.44 crore (about $265 million based on the prevailing forex rates) and its holdings to 7.52% of the REIT's units.
In July last year, Bain sold 17.82 million units of the REIT, or a quarter of its stake, for Rs 691.42 crore. Overall, Bain's harvest after including the latest unit sale totals to Rs 3,016.70 crore, or about $323.3 million.
The full exit has helped Bain to score an internal rate of return (IRR) of a tad more than 12% in rupee terms, according to VCCircle estimates. Its annualised return in dollar terms, which is more relevant for the American PE firm, would be around 7.4% due to the rupee's depreciation against the greenback, the estimates show.
However, these estimates don't take into account the quarterly distributions that the REIT has been paying its unitholders. The PE firm has likely mopped up a total of Rs 479 crore in such payouts between May 2023 and August 2026, according to VCCircle calculations based on the REIT's distribution data. These regular payments take Bain's IRR to almost 20% in rupee terms, matching the PE industry's exit benchmark, VCCircle estimates show.
Bain's other activities
The PE firm invests in India mainly through its regional and global investment vehicles. In May, it concluded fundraising for its new Asia fund after collecting $10.5 billion. It also has a locally registered vehicle for special situations investing and the India Resurgence Fund with Piramal Group to invest in distressed assets.
The PE firm's India portfolio includes wealth manager 360 ONE WAM Ltd, gold-loan financier Manappuram Finance Ltd, chemicals maker Novopor, healthcare technology services provider CitiusTech and auto-parts maker RSB Transmissions, apart from Dhoot Transmission. It added Meyer Organics to its portfolio last month as part of the acquisition of UK supplements maker Vitabotics and bought a 50% stake in a real estate project of the Brigade Group in April through its India special situations fund.
Bain monetisation activities include the PE firm pulling out Rs 1,408 crore ($147 million) via the partial exit from Dhoot Transmission with a high IRR and the sale of its stake in Emcure Pharmaceuticals in three tranches that add up to Rs 1,254.4 crore (about $130 million). Last year, the PE firm scored blockbuster returns by selling part of its stake in 360 One WAM.
Published by HT Digital Content Services with permission from VC Circle.