Blackstone to invest $2 bn yearly in India, wants quicker M&A clearances

Global private equity major Blackstone Group is confident of investing $2 billion annually in India, a top official said on Wednesday.

Its chief operating officer Jonathan D Gray pitched for a slew of measures to improve the ease of doing business for firms like it in India, including quicker approvals on mergers and acquisitions, easier privatisation of listed companies, and improvements in dispute resolution in commercial matters.

The New York-based group, which has been operational in India for nearly two decades, said Indian PE investments have delivered the highest return for it worldwide, and the investment in realty, which made it the largest landlord in the country, has also delivered well.

"We plan to invest around $2 billion every year in India," its senior managing director Amit Dixit told reporters here.

The firm has invested a total of $50 billion in the country till now, and the value of its assets, after accounting for the exits, stands at $30 billion. It has an investment team of 75 people based in Mumbai who scout for assets across sectors.

Dixit said over the next five years, the value of assets is seen rising by $25 billion, including $17 billion in fresh bets and up to $7.5 billion value creation across portfolio companies, where it has already invested but is yet to exit.

Gray suggested some reforms while appreciating the work already done by the government, including the Insolvency and Bankruptcy Code and the Goods and Services Tax.

A merger and acquisition deal takes up to two years to go through in India, while the same in its home market of the US gets done in weeks, he told reporters here.
 

In the case of privatising a listed entity, Indian regulations require the nod of over 90 per cent of all shareholders making a deal "mathematically impossible", he said, adding that it is because of challenges on this front that India has 7,000 listed entities, which is double that of the US, but their market capitalisation is just a tenth of the US.

"One thing that can help unlock the market here is the ability to take companies private to help improve them, then bring them back to the market with more scale. It's just one of the reforms," he said.

There is also more work to be done on dispute resolution in matters of commercial disputes, he said, adding that all these aspects will help attract more capital into the country.

He also said that some reforms like allowing public funds to invest in real estate investment trusts -- the group was a sponsor to three of the four listed REITs -- can also be helpful.

The economic momentum is building in India and not slowing, Gray said, adding that this is attracting a lot of global investors into the country.
 

Blackstone's favourites for the future will include the infrastructure sector, where it has not been as active in India as it has been in Europe and the US, Gray said, adding that there is also a possibility of it starting a credit fund like many of its peers have done.

Apart from that, it is keen to invest in real estate, logistics, data centres, hospitality, value-added exporters, energy transition and themes playing on the growing middle class in the country, including sectors like healthcare, financial services and travel, Gray said.