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“We have a record investment in India now and we are continuously looking to step it up,” said Rohit Sipahimalani, joint head for Temasek’s operation in India. The investment company is now sitting on the highest liquidity of $27 billion over the last five years in its $197 billion books, as it is finding the valuations stretched. “We want to step up more than even what we are doing in India now but it is really a function of the right opportunity,” Sipahimalani said. Temasek claim that valuations are well above average across major global markets due to quantitative easing by central banks. Low interest rates have created liquidity that is keeping valuations at a high. Now with the developed markets seeing double-digit earnings growth after a gap of two years, interest rates are expected to see a reverse trend. Though this is expected to be a gradual process.
Temasek started investing outside its home country in 2002-03. It does not want to be called a fund, as it does not raise money from outside but has its own balance sheet and pays taxes like a company. It makes investments through its own divestments or earnings through dividends. In India, it started investing in 2004 to tap the opportunities that came with rising consumption. In the past five years, on an average, it has invested $1 billion annually.
“We had a record net global portfolio value of $197 billion at the end of March. Out of this about $10 billion is invested in India now,” said Promeet Ghosh, managing director for Indian operations at Temasek.
Last year, Temasek exited Bharti Airtel by selling its stake to SingTel as part of its global portfolio restructuring. Also late last year it increased exposure to financial services in the country by picking up a stake in SBI Life Insurance.