Avendus PE brings a private equity evaluation approach to investing in public markets which entails an in-depth primary research, multiple management meetings, thorough commercial due diligence including customer feedback and reference checks on management. Post investment, it follows an active engagement model with its portfolio companies through constructive action or feedback rather than by having any affirmative rights or control. Areas of engagement can include improving investor relations, corporate governance and talent introduction.
The firm sees an attractive opportunity in the private equity evaluation approach to public markets in India. There is a large universe of 3,000 regularly traded companies in India, of which more than 2,800 companies have market capitalization less than US$1 billion*. Only the top 200 companies have quality research coverage creating attractive investment opportunities for a fund which is willing to undertake in-depth research.
While being sector agnostic, Avendus PE has a preference for investing in sectors which benefit from India's rising consumer discretionary spend, rapid urbanization and rural prosperity. Avendus PE selectively invest in companies undergoing special situations like corporate restructuring, entry into new businesses, turn-around cases etc.
* Source: Bombay Stock Exchange, Capitaline Database