Axis Asset Management Company Limited (Axis AMC), promoted by Axis Bank, and Inversion Advisory Services, promoted by telecommunications veteran Akhil Gupta, have announced that they have entered into a partnership to invest in underperforming companies. They plan to raise upto Rs 3,500 crore for the proposed new fund under its Alternative Investment Fund registration. They aim to acquire controlling stake primarily in pre-stressed, stressed, distressed and other underperforming asset, according to a press release.
They also seek to take advantage of the strong fund management expertise of Axis AMC and operational and turnaround expertise of Inversion to offer a unique platform for investors.
It will be a unique first of its kind offering that will look to take controlling equity stakes in underperforming companies before working with them to turn them around. It will thus help such quality companies with strong performance and operational capabilities which may be facing temporary headwinds owing to special circumstances including unsustainable debt, temporary disruptions, etc. to get on a credible turnaround path, the release added.
The partnership seeks to help fill the gaping shortage of high quality equity capital in the country’s stressed company ecosystem, which has seen a number of debt offerings but lacks strong equity investors with operational skill set.
Chandresh Nigam, MD & CEO, Axis AMC said, “With our entry into the exciting space of turnaround investing, we believe we have created a unique proposition for investors looking to participate and benefit from the India growth story”.
Akhil Gupta, Chairman, Inversion Advisory Services said, “The combination is ideal to not just exploit large untapped potential in this space but also serve an important social purpose in saving large number of jobs and capital already invested by shareholders, lenders and vendors in such companies”.
Amitabh Chaudhry, MD & CEO, Axis Bank said on the entry into turnaround space, “I strongly believe that together we can create an offering that can help investors participate profitably in this asset class. The addition of this new capability will also take us forward on our path of creating a market leading alternatives platform within the AMC”.