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G. Naga Sridhar

Hyderabad, Nov. 17 Chicago-based private equity player McNally Capital is planning to invest in the Indian biotech, healthcare and food-processing industries in view of the sound fundamentals, according to its Managing Partner, Mr John P. Rompon.

Talking to Business Line on the sidelines of a CEOs club meeting of the Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) here on Saturday, Mr Rompon said there has been greater interest on investing in India due to slowdown in the US economy.

The investment of 100 families in the US whose wealth is in excess of $100 million is routed by McNally. “Though our fund size is $75 million in general, we can access greater funds if there is an attractive investment opportunity,” he said.

The member-families of McNally usually invest 90 per cent of their wealth in the publicly traded companies leaving the rest for private equity investment abroad. “Due to the slowdown, we are looking for safer and better returns on equity investment,” he added.

At present, McNally has invested $25 million in Indian companies which include two service providers based out of Hyderabad. “We have also invested in Indian companies engaged in food and healthcare business here and want to ramp it up further,” Mr Rompon said while declining to name any companies.

On the likely impact of US slowdown on the bilateral investment pattern, he said: “This is indeed a good opportunity for Indian investors to buy equity in the small businesses in the US due to drastic dip in their valuations.”

The US investor perception about investing in India remained highly positive and there should be no bottlenecks in investment. “The drivers for US investment in India are transparency in contracts, rule of law, and high liquidity in the stock markets. It is easier in India to take a company public and exit safely,” he pointed out.

McNally would stay invested for 5-7 years in a company, he added.

“But the problem with Indian companies is that they are active in soliciting investment from outside but they don’t spend it on the expansion immediately. This may impact return on equity,” he observed.

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