Eyeing mid-cap buys: CLSA Cap Partners

Excerpts from Closing Bell on CNBC-TV18 Watch the full show » RELATED NEWS 2007 to be a tough year for emerging markets: CLSA Indian market valuation is high: Chris Wood ALSO READ See latest News about Apar Ind See previous management interviews See what other Experts & Brokerages are saying about Apar Ind Apar Ind BSE | NSE 25/05/12 Are Mutual Funds betting on Apar Ind? Other Stocks in this news Everest Kanto Cylinder | Havells India | Sanghvi Movers |

FIIs have been very quiet to start 2007 with. However, a lot of individual deals have been struck, and CLSA Capital Partners just picked up a stake in Sanghvi Movers, a mid-cap stock, investing USD 16.5 million in the company.

Gary Ng, Director, CLSA Capital Partners says the company is eyeing mid-cap Indian firms. He further says that the company is also on the lookout for buyouts.

Excerpts from CNBC-TV18's exclusive interview with Gary Ng:

Q: What excited you about the prospect of Sanghvi Movers ?

A: Sanghvi Movers is the largest crane hiring company in India and we see it as a great proxy to Indian infrastructure growth. We think that over the next five years there is going to be a huge amount of spends on infrastructure and Sanghvi Movers would be a direct beneficiary.

Q: What kind of growth do you expect from the company, given that you are bullish in this space?

A: I think at least 30% growth rate is sustainable over the next few years.

Q: Would you be looking at increasing your stake in the company?

A: After this capital infusion, we will be holding 10% in the company and if there is an opportunity, we might pick up more from the markets.

Q: You have got another interesting pick like Everest Kanto ; tell us why you like that story?

A: Everest Kanto has done pretty well for us and we picked up about 10% stake three months ago. The company's share price has appreciated. It is a play on cleaning up of environment in Delhi and Mumbai and the company is going to China; that is exciting for us.

Q: You also have a stock called Havells India , what excites you about that story?

A:  Havells India is one of our best performers and it's done well; it's turned from a cable and wires and switch gears company to a consumer durables company. The company has a strong position in electrical durables and is building up the Havells brand into one of the key players in the market.

Q: What is the story in Apar Industries  that you like?

A: It is a play on power infrastructure. The company manufactures transformer oils and power conductors and we see a lot of growth in that sector.

Q: Are you looking to up your exposure in the India midcap stocks because you seem to be quite focused in that space?

A: We are currently focused on Asia and in India, we tend to look at midcap companies, but we are slowly increasing our view sights. We have just closed a fund of USD 330 million in May 2006 and are looking to do larger deals up to USD 40-50 million. We are also on the lookout for buyouts.

Q: Anything else aside from the stocks we talked about that you have under your coverage?

A: Besides these four, we have two investments in Jyoti Labs and VLCC.

Q: Any sense of how much more money you would like to commit to India over the next quarter?

A: We will be looking at a minimum USD 100 million invested in India over the next three years.