New Delhi, July 7 -- Temasek, one of the two sovereign funds of the Singapore government that has been active in India along with its bigger peer GIC, has catalysed a double jackpot with an Indian portfolio company it first backed in 2015.
The state investment firm, which logged the biggest exit ever in India by a private equity-style offshore investor last year when it signed off from a local joint venture with Schneider Electric, has divested over a third of its 6.47% stake in PB Fintech Ltd, the company behind insurance-tech venture Policybazaar.
Temasek encashed Rs 1,633 crore ($170 million) via the stake sale on the secondary market late last week, stock-exchange data show.
Temasek had invested in Policybazaar via two separate channels. It had come in as part of a Series D round in early 2015 and then picked up a stake in one of the existing investors in the company later that year.
Temasek sold its direct stake in Policybazaar more than two years ago. It offloaded its entire 5.4% direct stake in PB Fintech for Rs 2,425 crore, or around $300 million then. This came over 18 months after it trimmed its holding and harvested around Rs 60 crore.
In total, Temasek is believed to have generated an estimated internal rate of return (IRR) of over 40% in rupee terms from the direct investment. This translated into one of its best-known exits from India ever as of 2024, as per VCCircle estimates.
Temasek separately had invested Rs 229 crore in two tranches in Makesense Technologies Ltd (previously part of Info Edge India Ltd) during 2015 and 2018 to get around a 50% stake. Makesense merged with Policybazaar last year and Temasek got a 6.4% direct stake again in the company.
With the latest partial exit, it has generated a multiple on invested capital (MOIC) of around 30x and an IRR of 37% in rupee terms on a first-in, first-out basis. In dollar terms, the multiple and annualised returns are pegged at 20x and 31%, respectively, VCCircle estimates show. That beats the minimum 20% IRR that PE investors chase in rupee terms and 15% in dollar terms. However, sovereign wealth funds and other state-owned investors may have more conservative return expectations.
Temasek's remaining stake in the company is worth around Rs 3,100 crore.
Policybazaar share price had shot up 50% soon after listing in 2021 but came under heavy selling pressure thereafter due to a rerating of internet stocks globally. However, it has bounced back since then and is now trading well above the level at which it issued shares to the public.
Meanwhile, Temasek has set itself for a series of other profitable exit moves as two of its key India portfolio companies, the National Stock Exchange and Manipal Hospitals, are set to go public.
Published by HT Digital Content Services with permission from VC Circle.