Despite the pickup in the investment climate in the developed world, multilateral private equity players and sovereign funds are looking to scale up their India exposure, with the energy sector a key focus area.

IFC, the World Bank's private sector lending arm, reported its single-largest country exposure at fiscal year-end 2010 to India at 10 per cent of total committed portfolio.

The trend is set to go up as it looks at increasing equity investments over debt funding in private firms here.

GIC, the sovereign wealth management fund floated by the Government of Singapore with a portfolio valued at more than $185 billion, opened its India office in Mumbai late last month. Through this, it expects to improve market tracking and ramp up investments. Norway's Norges Bank Investment Management and the Abu Dhabi Investment Company, the wealth fund of the UAE, are also actively scouting for opportunities, especially for infrastructure sector buys, industry players said.

The interest shown by these players comes at a time when private equity investments in India doubled to $7.9 billion in 2010, from $4.1 billion a year ago.

During the first January-March, 2011, private equity funds invested $3.3 billion in India, 57 per cent higher than last year, with infrastructure and manufacturing companies garnering the most interest, according to data from Venture Intelligence.

IFC, all of whose loans are to private-sector entities or quasi private sector entities, has been gradually ramping up its exposure to India over the last five years. It held portfolio of $3.6 billion (as of January 2011) in India, making it IFC's largest country of operations with commitments of $1.8 billion in financial year 2010 alone, overtaking Brazil and higher than Russia and China. Cumulatively, IFC had $61.1 billion in total assets at fiscal year-end 2010 (June 30), of which $29.2 billion represented development-related exposure (DRE).

GIC or the Government of Singapore Investment Corporation, which has invested in several Indian companies including ICICI Bank. and Fortis Healthcare Ltd, officially opened its India office in Mumbai on March 31, which is GIC's eighth overseas office outside Singapore.

The India office will be headed by Mr Kishore Gotety and will have more than 10 investment and asset management professionals.

The GIC Deputy Chairman and Executive Director, Dr Tony Tan, said, “In India, GIC has been investing across the public and private markets since the early 1990s.

“It (the setting up of the India office) demonstrates GIC's commitment to secure a larger role in the Indian growth story.”

Other PE biggies such as KKR and Blackstone are looking to scale up their India exposure, with KKR having already beefed up its India team with the appointment of a Director based in Mumbai late last year. Blackstone – which deployed over $700 million of capital in the last quarter, almost entirely in Asia, with a significant chunk coming to India – expects an increase in investments in 2011, with a bullish stance on energy sector investments, industry players said.

Related Topics