How was Temasek's fourth exit move from India portfolio within a month?

New Delhi, July 23 -- Temasek, the Singapore government's investment firm that is active in India alongside its larger peer GIC, has clocked its fourth liquidity move from its India portfolio in less than a month.

The investment firm, which is also monetising its bets on fitness chain Cult.fit, hospital chain Manipal Health Enterprises and the National Stock Exchange as they head for public listings in coming months, has reduced its stake in automobile marketplace CarTrade Tech Ltd through open market transactions.

This comes after Temasek, along with Indian private equity firm True North, last week struck a deal to sell their entire stake in Indian drug formulations maker Integrace Pvt Ltd to US buyout firm Warburg Pincus. Temasek is likely to have taken a small haircut in rupee terms and book an even bigger loss in dollar terms at the reported valuation.

Prior to that, VCCircle reported that Temasek sold close to a third of its stake in Mumbai-listed eyewear retailer Lenskart, harvesting nearly $200 million (Rs 1,924 crore), generating a bumper exit. It also made an exit from PB Fintech Ltd, the company behind insurance-tech venture Policybazaar, scoring a double jackpot.

In the case of CarTrade, Temasek has offloaded a stake of more than 4% in multiple tranches over the past 18 months-from 11.9% at the end of 2024 to 7.75% currently.

Temasek's most recent tranche of sale was last week, when it offloaded about 0.3 million shares and pocketed Rs 91 crore ($9.4 million). This came after it took out about Rs 84 crore a few weeks earlier.

The investment firm also divested part of its stake last year. The exact timing for these share sales couldn't be ascertained but Temasek may have mopped up anywhere between Rs 185 crore and Rs 220 crore, according to VCCircle estimates based on CarTrade's prevailing share price.

Overall, the firm has harvested nearly Rs 360-400 crore since January 2025, the estimates show.

The latest partial exit this month has helped Temasek to generate an internal rate of return (IRR) of close to 15-16% in rupee terms and a multiple on invested capital of around 4.0-4.2x, according to VCCircle estimates. That's less than the 20% IRR that private market investors typically target in local currency, though sovereign wealth funds, pension funds and state-backed investment firms such as Temasek may have a different benchmark.

Previous exit moves, overall returns

These liquidity moves add to Temasek's previous partial exit during the Mumbai-based company's initial public offering in August 2021. The IPO was entirely an offer for sale of Rs 2,998.5 crore, which saw Temasek participating along with Warburg Pincus, JP Morgan and others.

Temasek encashed Rs 821.4 crore in the IPO, generating an MOIC of 2.9x on its investment and an IRR of 20.6% in rupee terms, according to VCCircle estimates.

However, CarTrade, like many other tech startups in the country, was hit by a global sell-off and saw its stock tumbling. By March 2023, its stock had slumped almost 80% from the IPO price.

Temasek made a partial exit in June 2024, selling a 4.4% stake for Rs 168 crore. It logged an IRR of just 3.5% and an MOIC of 1.3x in this tranche, VCCircle estimates show.

The stock has since recovered and is currently up almost 67% from the IPO price. This has helped Temasek to generate higher returns in the latest tranche.

Overall, Temasek has mopped up nearly Rs 1,350-1,400 crore from CarTrade so far. This has helped it realise an overall MOIC of around 2.5x and an IRR of around 15% in rupee terms, VCCircle estimates show.

Temasek's remaining stake in the startup is currently worth almost Rs 1,040 crore, paving the way for a Rs 2,400-crore exit and an MOIC of somewhere in the 3x range on a decade-old investment.

Temasek first invested in CarTrade as a part of the company's Series F round in 2016. It infused nearly Rs 332 crore in January 2016. It doubled down in the Series G round, putting in Rs 242 crore more. This round also included some secondary purchases. Between June and October 2020, Temasek put in another Rs 107 crore in the Series H round, with Warburg Pincus also participating. Overall, Temasek invested almost Rs 770 crore in the auto marketplace.

Temasek's returns are similar to Warburg's, which wrapped up its exit from CarTrade in September 2024. The American PE firm is likely to have cashed out from the company with a total of Rs 2,070 crore or $270 million, across multiple sales, and managed to log a 13-14% IRR in dollar terms, as against the 15% benchmark. In rupee terms, Warburg is estimated to have churned out an IRR of around 17-19%, falling short of the 20% benchmark.

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