Blackstone Says Credit Crunch Won't Halt India Deals

From Staff Reports

The Blackstone Group LP (NYSE: BX), the world's largest private-equity fund, said its buyout projects in India will not be deterred by the worldwide credit problems, the company told Bloomberg News this week.

The New York-based Blackstone just agreed to buy a controlling interest in India's largest garment exporter, Gokaldas Exports Ltd., in a deal valued at $165 million.

In June, the fund announced a management buyout of call-center operator Intelenet Global Services Pvt., and also Housing Development Finance Corp., India's second-largest mortgage lender. It expects to continue buying companies at the "normal'' pace, Akhil Gupta, chairman of Blackstone’s India investment arm, said in an interview.

"India deals aren't going to be affected” by the global credit crisis, since India’s regulations don't allow debt-funded takeovers, Gupta said.

Venture investments in India almost doubled to $5.55 billion in the first half of this year, according to Chennai-based Venture Intelligence, which tracks such deals. Rising funding costs that have made leveraged buyouts costlier in many developed countries won't impact India since regulations don't allow debt-funded takeovers, Gupta said.

``The deal sizes in India are a lot smaller and the laws anyway don't permit much of a leverage,'' he said. ``We may not do lots of deals, but we will do as many good deals as we get.''