Capital markets present a huge opportunity: Sudheer Kumar

Intel Capital has invested $23 million (Rs 105 crore) in three companies — July Systems, which provides mobile internet solutions; KLG Systel, whichis into energy management and provides smart grid systems; andMCX, the commodity exchange.

Sudheer Kumar Kuppam, managing director - India, Japan, Australia, New Zealand, and SouthEast Asian, Intel Technology, talked to DNA on the  improvement in the private equity environment and opportunities in Indian markets, including clean technology and capital markets.

How do you see the environment for private equity with an economic recovery apparently on course?
Whenever you see the capital markets or global economy not doing well, that is when you see a dearth of deals. You can see that 2009 was one year in which everyone was impacted. The global finance went back and that impacted financial capital numbers globally. Right now things are improving; looks like India is on track for an 8% GDP growth and we see plenty of opportunities.

Will it entirely be global factors affecting the private equity environment or would there be any domestic factors influencing deal flow?
Domestic factors are mostly positive, so, if at all there is any change, it would be because of the external factors.

Two companies in which you have investments have gone public, but you have so far chosen to stay on, what is your exit strategy like?
Typically, we invest capital in companies when they need our capital and a value-add that we can provide. We exit when we see that they no longer need our capital and are either supported by their initial public offer (IPO), capital market or a much larger company.

You are investing in some clean technology initiatives in the form of KLG Systel, what opportunities do see in clean technology especially after the Copenhagen summit?
One of the areas could be of smart metering solution; another could proper deployment of technology in the various energy generation, as well as consumption. We obviously cannot put a finger on the exact technology, but then as long as there is a technology component involved, we would definitely be interested.

You have invested in India Infoline and Sharekhan before and have now invested in MCX, do you believe there is more opportunity in the capital market segment for an emerging market economy such as India?
Yes, absolutely. It’s a huge opportunity for India, especially in the online trading space. You only need to check the numbers, the penetration of traders in the online space is very low, so it’s only an upside.

Is there a lot of room for co-investment in the current scenario?
Yes, I believe so. Intel Capital has a global syndicate program, so we have many partners worldwide and depending on the region, its dynamics and the value they bring to the table; we actively share the follow-on opportunities that we see in our portfolio or even new investment opportunities.