Indian GAAR victims? New Silk Route is planning to exit Indian companies in 12-18 months
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Jens Yahya Zimmermann
Partner
New Silk Route
Seven-year-old New Silk Route (NSR) has one private equity fund of USD 1.4 billion. With a focus on Asia, New Silk Route has invested in Indian companies like Reliance Infratel and Cafe Coffee Day. Jens Yahya Zimmermann, partner, New Silk Route says his focus this year will be on exiting companies in line with the Indian governments intention to commence the GAAR (General Anti Avoidance Rules in India) the next one to one and a half year period.
Zimmermann says despite the fact that exiting from the Indian and South Asian environment is challenging; he hopes to exit Indian companies prior to the GAAR rules coming into force in India, which means in the next one to one and a half year.
On the Asian economy, Zimmermann says, “We don’t have concrete plans per se, but a lot of the companies that we invest in, they would have potential to expand to Pakistan. We understand ourselves as a regional investor. So, we are excited if the region grows and trade barriers disappear over time.”
Below is the edited transcript of Zimmermann’s interview to CNBC-TV18.
Q. You have one fund right now about USD 1.4 billion. You are looking at raising another one?
A: Eventually, we are looking at raising another fund. But right now, our focus is on working with our investee companies and helping them achieve their goals.
Q. How much of the USD 1.4 billion fund have you exhausted so far?
A: We have invested more than 50 percent. So, we are coming to the end of our investment period. Also, the focus is to work with our companies to help them grow and then eventually also generate exits.
Q. New Silk Route started investing about six to seven years ago. So, what are your exit plans looking like at this point?
A: Well, we are working on a number of companies and working towards an exit with them. Obviously, in the Indian and South Asian environment, exits have been a challenge for the industry, but we are confident to achieve some exits in the next 12-18 months. That’s the main focus for us in this calendar year.
Q: Private equity players are currently struggling with exits. I do understand though that you are planning your first exit and that is of a media company in Orissa. Is it going to be an initial public offering (IPO)? How big an IPO will it be if it is going to be that route?
A: Whether such an IPO could occur or not depends on the capital markets. These capital markets are hard to predict. So, for us it is one possibility that the company is working towards to, but it is too early to tell.
Q: How are you now reading the Indian economy? We have seen a recent reform juggernaut that had opened up sectors like aviation and retail, are you feeling more positive, more optimistic, more confident about the India story post the reforms that we have seen being undertaken?
A: We don’t have concrete plans per se, but a lot of our companies that we invest in, they would have potential to expand to Pakistan. We understand ourselves as a regional investor. So, we are excited if the region grows and trade barriers are disappearing over time.
Zimmermann says despite the fact that exiting from the Indian and South Asian environment is challenging; he hopes to exit Indian companies prior to the GAAR rules coming into force in India, which means in the next one to one and a half year.
On the Asian economy, Zimmermann says, “We don’t have concrete plans per se, but a lot of the companies that we invest in, they would have potential to expand to Pakistan. We understand ourselves as a regional investor. So, we are excited if the region grows and trade barriers disappear over time.”
Below is the edited transcript of Zimmermann’s interview to CNBC-TV18.
Q. You have one fund right now about USD 1.4 billion. You are looking at raising another one?
A: Eventually, we are looking at raising another fund. But right now, our focus is on working with our investee companies and helping them achieve their goals.
Q. How much of the USD 1.4 billion fund have you exhausted so far?
A: We have invested more than 50 percent. So, we are coming to the end of our investment period. Also, the focus is to work with our companies to help them grow and then eventually also generate exits.
Q. New Silk Route started investing about six to seven years ago. So, what are your exit plans looking like at this point?
A: Well, we are working on a number of companies and working towards an exit with them. Obviously, in the Indian and South Asian environment, exits have been a challenge for the industry, but we are confident to achieve some exits in the next 12-18 months. That’s the main focus for us in this calendar year.
Q: Private equity players are currently struggling with exits. I do understand though that you are planning your first exit and that is of a media company in Orissa. Is it going to be an initial public offering (IPO)? How big an IPO will it be if it is going to be that route?
A: Whether such an IPO could occur or not depends on the capital markets. These capital markets are hard to predict. So, for us it is one possibility that the company is working towards to, but it is too early to tell.
Q: How are you now reading the Indian economy? We have seen a recent reform juggernaut that had opened up sectors like aviation and retail, are you feeling more positive, more optimistic, more confident about the India story post the reforms that we have seen being undertaken?
A: We don’t have concrete plans per se, but a lot of our companies that we invest in, they would have potential to expand to Pakistan. We understand ourselves as a regional investor. So, we are excited if the region grows and trade barriers are disappearing over time.
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