‘India is Blackstone’s second largest market outside the US, holds strong fundamentals’

Gray believes that the recent episode of sharp fall in share price in one of the largest conglomerates in India will not deter investor interest in India in the long term.

“Outside the United States, if you look at our equity businesses, the number one country would be the UK and number two would be India, which tells you Blackstone believes a lot in India. The fundamentals are excellent here for long-term growth: young population, hundreds of millions of people who speak English, more engineers than anywhere else in the world, very low-cost places to do business, enterprising people and a government that now development oriented. And we believe that as more infrastructure comes into this country, it can continue to grow at a much faster pace than the rest of the world,” Gray said at a media roundtable in Mumbai on Tuesday.

Gray said that in private equity, the firm has seen some of the highest returns in the world from India and it has also seen exceptionally strong returns in real estate.

“And so when you have success in any sector, you double down. We see India as a place that has a very bright future in terms of growth. And we are very well positioned to scale our are,” he said.

Gray said Blackstone, which has largely focused on buyout or control transactions, intends to increase its India investments in new areas such as development investment and is also excited about opportunities in infrastructure.

“We have done a deal in our growth equity space Xpressbees, which is in the e-commerce space. Because of all the entrepreneurial, technology strengths, we feel that growth will be a natural place for us to expand. I see infrastructure/energy infrastructure as a very interesting area here. Clearly, India needs more transmission, and it can certainly make the most of its strength in solar power. So, I think some of our energy and infrastructure practices can come through here,” Gray said.

While about 50% of Blackstone’s Asia fund is invested in India, Gray said the firm is not currently looking at setting up a dedicated India fund.

“I think over time it is possible that we can create sub-funds, if India becomes big enough where we can have parallel vehicles,” he said.

“But for now, we like the flexibility of being a pan Asian investor and at our scale we can still do a lot of business in India even if it is part of a larger fund. So in today’s situation I There is no dedicated India strategy visible.”

When asked about the concerns of global investors over the recent episode in the Adani Group, which has seen trillions of investor wealth eroded in a span of a few weeks, Gray remarked that the episode will raise the bar and improve the standards of corporate governance. India Inc.

“Investors want to know whether the corporate governance is fair; What is transparency? His questions will be about what this means for the Indian market. There is sometimes pain with a country that is moving from early emerging market status to something more mature. I think our investors haven’t lost confidence since we’ve had so much success with our investments here, but they obviously ask questions when there are some headlines in the papers every day.”

Gray said he does not see the recent events as a long-term handicap for India.

“If anything, when these things happen, it raises the bar for everyone and forces people to work to a certain standard and with time, India will continue to make progress in this area. And as it does that, it makes it easier for capital to come,” he said.