Jonathan D. Gray, the Chief Operating Officer, advocated for a series of measures aimed at enhancing the ease of conducting business in India for firms like Blackstone. These measures include expediting approvals for mergers and acquisitions, streamlining the privatization process of listed companies, and enhancing dispute resolution mechanisms in commercial affairs.
Having operated in India for nearly two decades, the New York-based firm highlighted that its investments in the Indian private equity sector have yielded the highest returns globally. Additionally, its significant investments in real estate have positioned it as the largest landlord in the country, contributing to its overall success.
“We plan to invest around USD 2 billion every year in India,” its senior managing director Amit Dixit was quoted as saying.
The company has invested a cumulative sum of $50 billion in the country thus far, with its asset value currently standing at $30 billion post exits. Operating with a team of 75 professionals based in Mumbai, they actively seek investment opportunities across various sectors.
Dixit projected a potential increase in asset value by $25 billion over the next five years. This includes $17 billion in fresh investments and a potential value creation of up to $7.5 billion within existing portfolio companies yet to undergo exit.
Gray commended the government’s efforts, particularly highlighting reforms such as the Insolvency and Bankruptcy Code and the Goods and Services Tax, while suggesting additional measures for improvement.
He noted a stark contrast in the duration of merger and acquisition processes, stating that while such deals take up to two years to finalize in India, the same processes are completed within weeks in the company’s home market of the US.
Regarding the privatization of listed entities, Gray explained that Indian regulations necessitate approval from over 90 percent of all shareholders, making such deals “mathematically impossible”. This, he suggested, contributes to India having double the number of listed entities compared to the US, yet their market capitalization remains only a fraction of their US counterparts.
“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.
He noted that there’s further work needed in improving dispute resolution for commercial matters, emphasizing its role in attracting more capital to the country.
Additionally, he highlighted the potential benefits of certain reforms, such as allowing public funds to invest in real estate investment trusts, of which the group sponsored three out of the four listed REITs.
Gray remarked that India’s economic momentum continues to strengthen, with a steady influx of global investors into the country.
Looking ahead, Gray mentioned Blackstone’s interest in expanding its presence in India, particularly in the infrastructure sector, where it has been less active compared to Europe and the US. He also mentioned the potential establishment of a credit fund, aligning with industry trends.
Furthermore, Gray outlined Blackstone’s investment preferences, which include sectors like real estate, logistics, data centers, hospitality, value-added exporters, and energy transition. He emphasized the significance of sectors catering to the burgeoning middle class, such as healthcare, financial services, and travel.
(With inputs from PTI)
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Published: 03 Apr 2024, 06:14 PM IST