Singapore-based Temasek Holdings expects to swell its India portfolio by another $9-10 billion over the next three years, doubling or even tripling its India share in the global portfolio, considering the increasing opportunities it sees in the world’s fifth largest economy.

At $17 billion, India currently contributes 6 per cent to the global investment company’s total portfolio of $287 billion — from 5 per cent last year and 3 per cent five years ago. “Our assessment today, basis the opportunities we are seeing, is that we can double or triple this in the next three years... we could do $9-10 billion in three years from today,” Vishesh Shrivastav, Managing Director, Investment (India) at Temasek, told businessline.

On an average, the company has been investing $1-1.5 billion in India every year and sees this pace accelerating with more opportunities. The sectors that it is betting on are healthcare, software-as-a-service, fintech companies, e-commerce, electric vehicles and electronics manufacturing services, in line with its investment trends around digitisation, sustainable living, consumption and longer life spans.

The investment firm, which has been investing in India for around two decades, follows a bottom-up approach. Recently, it closed a $2-billion plus investment in Manipal Health for a majority stake in the healthcare provider. “We are happy with the portfolio we have in India... returns have been great,” Shrivastav said. He added that the rise in per capita income, increase in purchasing power, rising consumption levels in the economy were all the reasons for the firm being positive about India. Stable government policies, ease of doing business as well as better quality of entrepreneurs and companies “give us great enthusiasm”.

Beating market

Since April 1, 2023, the firm’s portfolio in India has exceeded stock market returns, that have appreciated around 13 per cent in FY24 so far. “The desire to increase partly comes from our outlook, partly from our track record, to the extent that the portfolio has done well and it inspires confidence to step up our investment meaningfully,” said Mohit Bhandari, MD, Investment (India).

Some of Temasek’s major direct investments in India include Adani Ports, Lenskart, Country Delight, AU Small Finance Bank, PB Fintech, Pharmeasy, Zomato, Tata Play and Info Edge. It is also present in India through portfolio companies such as CapitaLand, Sembcorp Industries, Singapore Airlines and Keppel Corporation.

Globally, Temasek saw a negative shareholder return of 3 per cent in FY23 due to global headwinds and its direct investments saw a reversal in gains. Both the officials said returns from India have, however, been in the positive territory, though they did not specify the number.

The firm has a sizeable portfolio in the financial services sector in India, since it is linked to consumption, digitisation and lifespan. It has exposure to banks, NBFCs, fintech and insurance companies.

‘Unique infra’

On the start-up ecosystem in India, Bhandari said it has matured with better quality of entrepreneurs and more innovation. “The underlying digital infrastructure is phenomenal and unique to India,” he said. Citing the example of Reserve Bank of India allowing First Loss Default Guarantee in digital lending, he said regulators were also striking a balance between different objectives.

“The start-up economy, the internet economy, is not only a substantial part of GDP today, but is likely to be an even larger part going forward,” said Shrivastava.