Bharti Teams Up with AXA for PE Fund

Bharti Enterprises and French insurance major AXA are planning to launch a private equity (PE) fund in India. Currently, both companies are working out the details of the JV effort for the Private Equity fund . A source in Bharti Enterprises (the holding company for all Bharti businesses like telecom, retail and financial services) confirmed the development, but said it was too early to spell out the details such as the shareholding pattern of the two partners in the JV and the amount the promoters would put into this PE fund.

Once operational, this will take the number of JVs between Bharti and Axa to five. At present, Bharti and AXA have a 74:26 JV for life insurance and a similar JV for general insurance. Both companies have also jointly launched an asset management company (AMC) to tap the growing mutual fund segment in India with AXA holding a 75% stake. The two companies have also agreed to set up a real estate fund, but they are yet to formalize the joint venture agreement for the same.

Bharti recently re aligned  its top management to focus on emerging businesses and appointed Akhil Gupta as deputy group CEO & MD of Bharti Enterprises to spearhead the group’s emerging businesses. In his new role, Mr Gupta is leading the financial services arm of the company which includes all Bharti-Axa joint ventures. Sources said that Mr Gupta will play a key role in the PE joint venture also.

Bharti Airtel chairman and group CEO Sunil Mittal during an interaction with the media on said that he expected the non-telecom business to contribute 50% to the company’s revenues in the next five years. Currently, telecom accounts for over 80% of the group’s revenues.

Recently, Bharti Enterprises unveiled a new strategic vision and brand identity aimed at building Bharti into India’s finest conglomerate by 2020. The new brand identity reflects Bharti’s strategic intent to create a conglomerate of the future by bringing about “Big Transformations through Brave Actions.”

Sunil Bharti Mittal, Chairman and Group CEO, Bharti Enterprises said, “At Bharti, we have always believed in undertaking transformational projects that have a positive impact on the society and contribute to the nation building process. We have demonstrated this philosophy by leading India’s telecom success story, with entrepreneurial spirit, innovation, and strong partnerships being the pillars of our growth. Having diversified into new businesses in agriculture, financial services and retail business with world-class partners, we have laid the foundation for building a conglomerate of future which will achieve US$10bn in revenues by 2010.”

“As Bharti enters its next phase of growth, we have a new vision to make Bharti, India’s finest conglomerate by 2020. Bharti’s brand essence of “Big Transformations. Brave Actions.” will define all our actions and drive forward this vision. Our new brand identity and brand logo reflect this philosophy.” added Mittal.

The group aims to build transformational business in the areas of retail, financial services and agriculture, which are future growth engines of India’s economy. Through the retail business, the group will enable millions of customers save money and live a better life. It will also benefit farmers, small manufacturers and small artisans across the country through sourcing of products.

With the financial services bouquet of life insurance, general insurance and asset management, the group strives to contribute to the process of financial inclusion in the country. The agri and food processing business of Bharti will contribute towards the transformation of the agricultural sector and rural economy to a global food basket.