Despite the current market volatility in the Indian stock markets that has alarmed its investors, American private equity major Blackstone plans to invest more in Indian infrastructure and real estate as it bets on sharp economic growth in the country.
“We have a long-term view on India as growth will be higher here. We have invested half of our Asia exposure in India. Our extraordinary performance in India has made us bullish,” said Jonathan Gray, President and Chief Operating Officer of Blackstone, about India’s growth prospects even as global markets roil due to the Ukraine war and fears of recession. “Picture Abhi Baki Hai,” Gray, a billionaire, said in Hindi about India.
Blackstone, which is one of the largest global investors in India with $50 billion of investments across real estate ($20 billion) and a portfolio of other companies ($30 billion), is scouting for investments in the infrastructure and real estate sectors.
In the backdrop of allegations against the Adani group, Gray said Blackstone is comfortable with what it is doing in India and the underlying fundamentals and cash flows of its investee companies. “There are growing pains at times with a country that’s moving from an early emerging market status to a more mature one. We take a longer term approach. I think because our investors have seen so much success generated by our investments here, that our investors have not lost confidence (in India),” Gray said.
“But they (investors) obviously ask questions when something’s on the headlines in the newspapers every day. The way we run these companies in India is incredibly professional and transparent. We follow the highest standards of corporate governance, and that’s what we’re trying to bring in as best practices. So I don’t think, at the end of the day, this is going to be a long-term impediment to what’s going to happen in India. If anything, I think when these things happen, it just raises the bar for everybody, and forces people to operate at a certain standard. And so I think, over time, India will continue to make progress in this area. And as it does, you know, it makes it easier for the capital to come in,” Gray said.
“It’s just like building the infrastructure which makes it easier for people to engage in commerce and putting in place best practices, corporate governance, and transparency which makes it easier for capital to show. And so I believe India is on that path. But there will obviously be some bumps in the road,” Gray said.
When asked about opportunities of investing in any Adani group projects, Gray did not comment but said whenever there’s dislocation, it creates an opportunity, and someone may need to sell assets or want to bring in partners which can lead to opportunities for Blackstone.
“I don’t know, in this particular situation, what’s likely to happen. All I would say is as a firm, we have large pools of discretionary capital. So if opportunities emerge, and our capital can be helpful in any situation around the globe, we’re able to do that,” Gray said about investing in any Adani group projects.
India is the top performing market globally for Blackstone Private Equity with investments in Mphasis, VFS, TaskUs, IBS Software, Xpressbees, Simplilearn. It sold Aakash education to Byju’s last year.
Buying great companies with strong growth potential like R Systems (a leading provider of IT services); VFS Global (global leader in visa outsourcing services); ASK (India’s largest asset and wealth management company); and Simplilearn (online learning platform) in 2022
Blackstone is building successful businesses in India like Sona Comstar, which transformed a traditional auto components supplier into a leading new-age EV parts supplier and is servicing one in eight EVs sold globally.
Blackstone is also the largest owner of commercial and retail real estate in India, with a portfolio of over $20 billion. The PE company wants to scale its real estate portfolio across logistics, retail, office and data centres. Its investments include Embassy REIT, Nexus Malls, Nucleus Office Parks, Horizon Industrial Parks, Lumina Data Centres.
Launching India’s first retail-focused REIT, following the success of the two REITs we’ve helped bring to India. Represents the first investment platform of its kind in India, capitalising on the country’s strong consumption growth.