DUBAI: More UAE firms are turning to India for funds and expansion in order to benefit from the resilience of the country's economy to the global financial crisis.
While Dubai-based alternative investment firm Evolvence Capital on Wednesday launched its third India-focused fund, UAE's incumbent Etisalat looked set to strengthen its presence in the Indian Subcontinent with reports suggesting it is close to buying a 26 percent stake in Reliance Communications.
Meanwhile, Zulekha Hospitals, a UAE-based health care group, said on Wednesday that it is planning to expand and restructure its affairs in the UAE and the Indian subcontinent. Clyde & Co, a leading law firm in the Middle East, is advising Zulekha on the restructuring as well as obtaining a $24 million convertible loan facility from the IFC, a member of the World Bank Group.
"The Indian economy has shown considerable resilience registering a 7.2 per cent growth in the financial year 2010, even during the global economic downturn," said Khaled Al Muhairy, Chief Executive Officer of Evolvence Capital. "We believe that this growth is broad based and will translate into long-term potential in the Indian private equity space."
The Evolvence India Fund II -- following the successful closing of Evolvence India Fund I in 2007 and Evolvence India Life Sciences Fund, a health care and life sciences fund in 2008 -- is targeting a corpus of $400 million from institutional and high net worth clients from across the globe, the company said in a statement.
The fund aims to make select investments in the mid-market growth capital segment in the Indian private equity market, through fund investments, co-investments and direct investments, it added.
In a separate development, sources close to the negotiations between Etisalat and Reliance said on Wednesday that the deal was close to being finalized and could be completed by August.
The deal, which is expected to be worth $3 billion, would give Etisalat, which is also poised to invest some $163 million to expand its Sri Lankan operation, an immediate presence in India, and also give Reliance, which has 100 million subscribers, additional funds for the roll out of its 3G network.
The Etisalat deal would also give Reliance, India's second-largest mobile operator, access to the UAE telecom firm's African assets, which include operations in Central African Republic, Gabon, the Ivory Coast, Egypt, Niger, Nigeria, Sudan and Tanzania.
Meanwhile, Zulekha is proposing to use $21 million of IFC's $24 million financing package to build a new 189-bed hospital in Nagpur, Maharashtra.
"We are very happy to partner with IFC, whose global experience and local knowledge of private health care in emerging and developing markets will help facilitate our expansion to India," said Dr. Zulekha Daud, 72, Managing Director, Zulekha Hospitals Group. The remaining $3 million will pay for energy efficiency-related expenditure at Zulekha's Sharjah facility in the UAE.
In the hospitality sector, Abu Dhabi-based Rotana group recently said that its three-star brand Centro could have scope for expansion beyond the Middle East and North Africa region to markets such as India. The company plans to open 25 such properties by 2014, with five hotels in the UAE.
By Walid Mazi
© Arab News 2010
