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Blackstone to invest $2 bn annually in India with primary focus on infra

PE major wants India to expedite M&A clearances and enhance commercial dispute resolution

Jonathan Gray, president and chief operating officer of Blackstone

Jonathan Gray, president and chief operating officer of Blackstone

Dev Chatterjee Mumbai

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US-based private equity (PE) giant Blackstone Group, which has already invested $50 billion in India, plans to inject an additional $25 billion into the country’s economy in the years ahead, with primary focus on infrastructure, data centres, and logistics.

“Blackstone continues to escalate its investments and perceives an opportunity to enhance the value of its PE assets by $25 billion over time, allocating $17 billion to new investments and $7.5 billion to value creation across its current portfolio companies,” said Jonathan Gray, president and chief operating officer of Blackstone, during a media round-table held here on Wednesday.

The investment is earmarked at up to $2 billion annually, said Blackstone’s India Senior Managing Director Amit Dixit.

Gray highlighted Blackstone’s desire for expedited clearances for mergers and acquisitions in India, along with a call for enhanced commercial dispute resolution processes. He emphasised that privatising a company in India is challenging, requiring 90 per cent of all outstanding shares to vote which is a "mathematical impossibility" in securing those votes.

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“As a result, India currently hosts 7,000 public companies — nearly double the US — despite having a market capitalisation one-tenth its size. I believe one factor that could facilitate market unlocking here is the ability to take a company private, enhance its operations, and then reintroduce it to the market with increased scale,” Gray noted.

“In the US, mergers can be concluded within several months, unlike in India, where the process often takes several years, thus impeding activity that could otherwise benefit the system.”

Gray commended the government’s efforts in developing the real estate investment trust (Reit) market but suggested further reforms to foster its growth.

“The Indian government has made commendable strides in the Reit market, enabling the creation of public Reits such as Embassy and others we’ve been involved in. Each incremental change made by the government simplifies the process further, enhancing business value and attracting more capital, thus facilitating a virtuous cycle,” Gray remarked.

Regarding Blackstone’s investment priorities, Gray identified the logistics, data centres, and hotels as particularly attractive.

“I am also bullish on hotels — there are promising fundamentals in this segment,” he added.

For the PE vertical, Gray expressed interest in value-added exporters, health care, and consumer-centric businesses.

“Companies like Sona Comstar serve as excellent examples of entities we seek — those with a global export presence. This rising middle-class phenomenon, which could be health care and financial services, could be related to travel. All of that, I think has a lot of runway. The global energy transition presents another crucial area for India’s growth,” Gray said.

 

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First Published: Apr 03 2024 | 10:53 PM IST

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