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Rajeev Misra’s $7 Billion Hunting For India Chances Following His Maiden Investment In Shapoorji Pallonji.

Rajeev Misra, who stepped down as an executive at SoftBank Vision Fund (SVF) a year ago, is open to investing in local companies through debt & equity acquisitions through his recently developed venture, One IM.

One IM, which has a capital of $7 bn, invested in a debt issuance made by the Shapoorji Pallonji group, marking the fund’s debut in India, according to Misra.

Rajeev Misra's $7 Billion Hunting For India Chances Following His Maiden Investment In Shapoorji Pallonji.

The $50 million credit infusion was part of a $1.7 bn bond offering currently completed by the Mumbai-based Indian Shapoorji Mistry-controlled firm.

To capitalise on the India growth chance, the former Deutsche Bank credit trader stated that One IM will focus on selecting indigenous enterprises outside of big conglomerates and groupings across public and private markets. If SoftBank passes on them, he will try to support lucrative growth-tech enterprises. The financial veteran is still the CEO of SoftBank Investment Advisers, in charge of SVF-I activities.

In May, One IM made headlines for offering a $470 mn high-interest loan to office-sharing firm WeWork, one of SoftBank founder Masayoshi Son’s greatest failed offers. It also put $250 million into the UAE national energy business Adnoc Gas, which went public, and a few 100 mn dollars into the Fortress Investment Group, based in New York.

Misra said the fund raised $7 billion in its first closure in January and will seek more in the following 12 months in India. One IM has no investment restrictions and can get into non-tech, tech, debt, or equity deals. One IM has a six-year investment period but, most crucially, a three-year reinvestment period, which means One IM may make short-term investments and reinvest again. One IM has spent nearly $1 billion so far. However, its first aim was to employ people in New York and London. According to him, One IM currently has Twenty people on board.

They have focused on determining where the strongest risk-adjusted returns exist now, and he believes such possibilities exist in the lending industry. Having said that, they want to begin investing in tech-enabled enterprises, not only Artificial Intelligence, in the next six months. In reality, most of the success stories like Policybazaar and Nykaa do not include artificial intelligence. They are even searching for good management in underserved industries, which may include oil and gas, he noted.

IHC, Alpha Dhabi, Mubadala, and the Abu Dhabi-based Office of Finance (Ministry of Finance for Abu Dhabi) are among the four sponsors or limited partners of one IM. Abu Dhabi is quite optimistic about India & intends to invest greatly in India. This is true not only for sovereign funds but even for private ones.

Rajeev Misra's $7 Billion Hunting For India Chances Following His Maiden Investment In Shapoorji Pallonji.

Yanni Pipilis and Munish Varma, two prominent SVF managing partners & Misra’s main lieutenants, joined One IM last year.

Despite overseeing SoftBank’s Vision Fund-I and being very powerful within the Japanese corporation, Misra stated that One IM will, at most, invest in growth-stage technology if SoftBank passes on certain startups. They have a system in place for identifying and managing prospective and real disputes with SoftBank and handling any price-sensitive information effectively. He stated that SVF-I no longer makes new investments and that it ceased operations in 2019.

One IM must have SoftBank clearance before investing in any SVF-I or SVF-II firm, and for SVF-I investments, the approval of the fund sponsors is also necessary. SoftBank at first evaluates each new investment in development technology. SoftBank might invest in anything they want, and One IM might invest in whatsoever they want. Softbank and One IM are regulated in the United Kingdom, the United States, and other countries, so their rules, processes, and controls are audited on a regular basis, he noted.

WeWork has loans from Brookfield and Apollo that it aims to restructure. SoftBank had earlier promised the loans. Misra explained the loan transaction with WeWork by saying that Apollo and Brookfield refused to refinance. Therefore One IM stepped in.

SVF-I includes Indian startups like Ola, Paytm, Oyo, Delhivery, FirstCry, and Lenskart of India. ‘Vision Fund-I has already repaid 60% of the $100 billion,’ he claimed. Along with Arm, they have public holdings in companies like Coupang, Doordash, and others. They have notable public roles in the Chinese firm’s Didi and Bytedance, and The Fanatics, a large e-commerce gaming firm,’ Misra noted.

Rajeev Misra's $7 Billion Hunting For India Chances Following His Maiden Investment In Shapoorji Pallonji.

SoftBank, which has even made new stakes from its Vision Fund-II in Flipkart, Elastic Run, Meesho, and other companies, has been slowish to make new investments in India. In 2023, the Japanese fund has yet to write a check in the local market.

In India, the prospects are in their early stages, ranging between $1 and $20 million. While they are able to secure a $20 million investment, they will not do so as SoftBank. As a result, they are waiting. More investments would be made in the second part of this year, according to Misra.

Companies that raise enough capital in 2021, according to Misra, can withstand the current liquidity pressure and avoid a down round, raising money at a lower value than the earlier round. While prominent foreign software businesses like payments giants Stripe and Klarna have raised new capital in a down round, few significant Indian tech organisations have seen their valuations reduced in private investment in India. However, Misra believes that down rounds would eventually affect Indian entrepreneurs too.

He noted that there are still many chances in India. The stock market is at an all-time high in India, and there is a shortage of value, particularly in technology businesses, which have increased by 50%. He stated that there would be mergers and acquisitions, with some of these tech giants purchasing others.

Conclusion.

In an interview, Rajeev Misra stated that One IM, which currently has a capital of $7 bn, participated in a debt offering issued by the Shapoorji Pallonji group, marking the fund’s debut in India.

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