Temasek looks to invest in 3-4 Indian firms this fiscal

Temasek looks to invest in 3-4 Indian firms this fiscal

Mumbai: Temasek Holdings Pvt. Ltd, the investment arm of the Singapore government, is eying investments in three or four Indian companies this fiscal, said Manish Kejriwal, senior managing director, Temasek Holdings Advisors India Pvt. Ltd.

“If public markets improve, then we have the option of looking at investments through the public market," Kejriwal told a press briefing on Thursday, outlining his firm’s plan for the country.

In India, Temasek has invested in listed state-owned firms such as Coal India Ltd and Engineers India Ltd as well as in the country’s largest private lender ICICI Bank Ltd. Coal India is the world’s largest coal miner.

Temasek hasn’t made any investments in India this year. Last year, it invested more than $700 million (Rs3,108 crore today) in Indian companies, including $200 million in power producer GMR Energy Ltd and (Singapore) $240 million in the National Stock Exchange.

“While the emerging markets in South-East Asia and Africa account for 50% of our pie, India itself accounts for 20-25% among the emerging markets," Kejriwal said. China accounts for 30-35% of Temasek’s investment portfolio.

“There is likely to be a moderation in growth and pressure on margins (for Indian companies) and PE (private equity) funds will wait till the first quarter or second quarter results to evaluate the impact of inflation and slowdown in demand," said Vikram Hosangady, head of transaction services at consulting firm KPMG India Pvt. Ltd.

“While the traditional PE model does not involve investments in the public market, some PEs have agreed with their limited partners that a certain portion of the fund can be utilized for public market" to gain some flexibility in doing deals in India, he added.

The “foreign currency convertible bonds (FCCBs) market also offers a good opportunity for us when they are redeemed as companies would need money," said Kejriwal.

Hosangady said while FCCBs present a sizeable opportunity for PE funds, investors should do adequate diligence to ensure the discount-to-price conversion is justified.

Temasek will focus on investments in the financial services, ports, power, healthcare services and the technology, media and telecom sectors, Kejriwal said, adding there was no pressure on the firm to deploy capital.

“We will look at the broader range of financial services like mutual funds and non-banking financial companies," he said. Temasek also hopes to invest in Indian natural resource companies that are looking at assets abroad and in low-cost housing models.

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