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ASHISH DHAWAN
Sr MD, ChrysCapital
Private Equity Pasha
He has got investors who love him and a marketplace that's red hot. Private equity's poster boy is on a roll.
By R. Sridharan
IT'S A MONDAY AFTERNOON, AND AT CHRYSCAPITAL'S HEADQUARTERS IN central Delhi (actually a first-floor suite in the Oberoi Hotel), there are eight men seated around a large oval table in the conference room, taking stock of the firm's portfolio companies and discussing possible investment opportunities. It's a weekly ritual they've been following for years, but of late, the mood around the table at such review meetings has tended to be sombre. The principal source of that sentiment is a tall, lanky and bespectacled man, who (along with a Harvard buddy) launched ChrysCapital eight years ago.
Ashish Dhawan, 38, the man in question and the one who can justifiably take credit for turning the global private equity investors' attention to India, doesn't quite like what he sees going on around him in the industry. Stock valuations, as measured by the bellwether 30-share index Sensex, are at record highs; the Sensex stocks, for example, are trading at an average earnings multiple of 26; there are just too many funds in the market (at last count, their number was put at 450-odd); worse, it's not just valuations, but in many sectors the business cycle seems to be turning down. "There's just too much money sloshing around at present, and we feel that the extraordinary times we've seen over the past five years (in terms of returns) may not continue too far into the future," says Dhawan.
It's not the best thing to be saying when you've just finished raising, like ChrysCapital has, $1.25 billion (Rs 5,000 crore) in funds from foreign investors. But, then, that is classic Dhawan strategy: Under promise and over perform. Over the last eight years since he opened shop as a near one-man outfit in an industry dominated by institutional players, Dhawan has raised $2.5 billion (Rs 10,000 crore) in five rounds on the promise that a) India as a market can generate better returns, and b) ChrysCapital is a better investor than a lot of its competitors. So far, he's been right on both the counts. Like Dhawan points out,...