As global markets soften, Temasek bets on investing in India

Varun Aggarwal Mumbai | Updated on July 12, 2019 Published on July 12, 2019

The $231 billion fund already allocated $11 billion investments to India

United States (US)-China trade war could be a boon for India as large private equity investors such as Singapore-based Temasek are doubling down on their investments in India as it sees the country as a beacon of hope for growing their investment portfolio.

Of its $231 billion portfolio, Temasek has already invested about $11 billion in India, its fourth largest market after US, China and Singapore. However, unlike other markets, Temasek is increasing its exposure in India as it hopes a stable government and reforms will translate into better returns.

"India has moved up from four per cent of our global investment to five per cent this year with an all time high of $11 billion investment. We have stepped up and maintaining our pace of investment in India of about a billion dollar a year," Venkatesh R, managing director (MD), India for Temasek, told BusinessLine.

"Broadly we are very constructive on India. We have seen the decisive mandate the government has got. The policy and reform process has been very steady and stable. In the first term, GST, IBC were great reforms. Our internal view is to step up in India," he added.

He said that Indian has had a minimal impact from the global slowdown that was triggered by the trade war between US and China.

India has minimal impact from a global slowdown being seen because of the trade war between US and China and in fact India tends to benefit from it if it is able to grab the opportunity.

"If they are able to get some manufacturing shifted from China to India, it'll have a big impact. We do have some sectors that can take advantage of the situation such as pharma, manufacturing," Venkatesh said adding that the company is taking a long term view on India and its typical investments in a business would range between 10-12 years.

Temasek invests in India

Temasek said it had anticipated an increasingly challenging environment since last July and moderated its investment pace; investing S$24 billion and divesting S$28 billion for the year. However, that change in strategy will not impact Temasek's investment plans in India. In fact, the company hopes to boost it.

In India, Temasek has invested in a varied set of industries, right from HDFC Bank, ICICI Bank to the likes of Ola and Zomato to even firms like Adani Ports and Schneider Electric.

A large part of Temasek's India portfolio has been built over the past five years. That's more than $5 billion of investments in last five years alone or nearly 90 per cent of its direct investments in India. The rest of its investments in India are through the global companies its invested in.

While Venkatesh declined to give a target of its investments for India, he said Temasek will continue to invest over a billion dollar a year in India. He added that if there are opportunities, it will invest even more.

Meanwhile, the active investment firm is also looking at synergies within its portfolio of companies in India to ensure a broader growth.

"We have investments in multiple sectors right from Infra to banking to technology to services. We do find companies benefit from connecting the dots, being able to leverage that ecosystem. It's something that we think will accentuate as we go forward. The opportunity of synergies is immense," Promeet Ghosh, deputy head for Temasek India said.

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Published on July 12, 2019
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