'There are all sorts of capital in India. There are also a host of financial investors who are looking at the country.'
'The opportunity is large. My view is that the best is yet to come.'
Cape Town-based leading technology investor Naspers, which recently made $2.2 billion on a $600-million investment in Flipkart after Walmart acquired 77 per cent in the Bengaluru firm, is ready with a war chest for the India market.
Bob van Dijk, bottom, left, chief executive officer of Naspers, is now betting on companies in food tech, payments, travel and other consumer sectors to tap the potential of the Indian market.
In a freewheeling chat with Karan Choudhury & Nivedita Mookerji at a roundtable, Dijk, however, said that finding an investment like the Chinese conglomerate Tencent, the crown jewel of Naspers’ portfolio, would be more than just difficult. Edited excerpts:
You have a war chest of around $10 billion. How much of that would be for India? Are you likely to bet on any new sector this time around?
Predicting future M&A is virtually impossible. If I could give you a number, I would, but I honestly do not know.
I have looked at so many great deals that did not go through.
There were so many deals that looked great but they turned out to be horrible.
If you view it backwards, we have invested over $2 billion in India over the years, as part of our overall investment.
I would say we have spent a very good chunk of our money in the Indian market. It is a very significant percentage.
Over the last 10 years, around 20 per cent of our total has been invested in India, but over the last few years, it’s been probably more than that.
The future is unpredictable--it could be much higher…. or it could be lower (laughs).
Do you see the Tencent success repeating in India for you?
There is no other investment like Tencent in any market anywhere in the world.
It delivered a 65 per cent annualised return over 18 years.
That is mind-blowing, there is nothing like it. So would I like to find another one like that? Well, that would be pretty nice.
But, is there another one like that? No, I do not think so. But I think if you are standing in the shadow of a giant, that is not a shame.
In Flipkart, we invested around $600 million in total, and we got $2.2 billion.
It delivered a 33 per cent annualised return on our investment made in 2012 . That is no shame, I am happy with that.
In the midst of a rush of investors from Japan and China, are you able to find firms that would give you maximum value?
There are all sorts of capital in India. It is not just the SoftBank Group or Alibaba.
There are also a host of financial investors who are looking at the country.
The opportunity is large and we are not the only ones to see that, but we saw it much earlier than others.
My view is that the best is yet to come. Will there be new companies in which we would commit similar capital? Maybe.
During Flipkart’s stake sale to Walmart, what role did Naspers play to successfully close the $16- billion deal?
It was a board process. There was varied interest from companies based on good performance from Flipkart.
We had quite a few discussions with the board and they supported us. We were definitely in Flipkart for the long-term.
What changed for us was that somebody (Walmart) wanted to buy a majority of the company. We were actually not expecting that.
In some ways, it was a hard decision. We like the company, we think it has a lot of runway.
But we are a strategic investor, so the moment somebody comes in and buys almost 80 per cent of the company, they will control the board and call the shots. I think the company has a great future but for us there was no room to be what we want to be.
Is Naspers in conversation with the Indian government to take its digital payments initiative forward?
We have someone on ground who works on relationships and represents our views.
We do not see ourselves as someone who will try to influence the regulator.
But what we do is give our point of view. The India stack is starting point of a lifetime.
India is a huge investment destination for us and I can only see it becoming bigger overtime.
The India stack is unique in the world, nothing resembles it and it will result in different business models.
It probably is the best thing a country has ever done anywhere. That holds a lot of promise.