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Allianz Investment keen to deepen India commitment

KR Srivats New Delhi | Updated on October 21, 2020 Published on October 21, 2020

Ritu Arora

Investment priority will continue to be on infrastructure, private debt, real estate and ESG sensitive investing, says Ritu Arora, CEO - Asia

Allianz Investment Management, a global investment manager, will continue to be actively engaged with India and “momentary setbacks” such as Covid-19 has “not shaken our strategic importance of India”, a top official said.

In fact, Covid-19 and the ensuing volatility is bringing some interesting opportunities for investors with longer-term horizons, Ritu Arora, Chief Executive and Chief Investment Officer for Asia at Allianz Investment Management Singapore told BusinessLine in an interview.

“We subscribe to the $5 trillion trajectory of Indian GDP growth. Probably Covid-19 has delayed the ascent to $5 trillion economy, but we don’t believe it has derailed it. The demographic sweetspot is intact. We have strategic commitment to India”, Arora said.

She highlighted that Allianz, which has invested and committed more than $3.5 billion (over ₹ 25,000 crore) in India over last three years across public and private markets, would continue to focus on investing in infrastructure, private debt, real estate as well as do ESG sensitive investing in the Indian market.

“India is among the most attractive investment destinations globally. It is on course to become a $5 trillion economy sooner than later. What most people miss is that a $5 trillion economy growing at 10 per cent nominal rate adds $1 trillion to its size every second year. Therefore, the growth rates can be potentially exponential. With such massive potential, India fits very well into our long-term investment philosophy”, Arora said.

Investment climate

Arora said that Allianz sees the current regulatory environment for investing in India as glass more than half-full and improving. “We are encouraged by reforms like IBC, GST, RERA and ease of doing business. The recent reforms on the agriculture side can be game changing. They will positively benefit a vast majority of India’s population, will help improve agriculture productivity, increase market availability for the farmers, and hopefully over the medium to long term reduce the requirement for subsidies to the sector.”, she said. This could open up precious fiscal space for the government over the longer term. Allianz welcomes these path-breaking reforms that will significantly benefit India’s growth trajectory and self-reliance, she added.

Market valuations

Asked to comment on global market valuations, Arora said it is a divergent picture in terms of valuations. “US market certainly does look richly valued on an aggregate basis. However, if one moves past the bigger tech names, the valuations overall are still in reasonable territory. In most Asian economies, markets have recovered from their March lows, but still remain 15-20 per cent below YTD. However, it would be too simplistic to have a ‘one size fits all’ view on the entire region. Investors will and are differentiating between markets, sectors, and specific names based on bottom up fundamentals. One therefore has to evaluate each market individually”, she said.

Insurance sector

As regards insurance sector, Allianz has two successful existing joint ventures with Bajaj Finserv— one for life insurance and the other on general insurance—in India. Allianz also provides reinsurance services through Allianz Global Corporate and Speciality. In addition, there are three service companies: Allianz Global Assistance, Allianz Technology and Euler Hermes, Arora said.

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Published on October 21, 2020
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