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Mumbai: The Hinduja Group says it is close to buying distressed assets in power and road even as it focuses on Africa for new business opportunities.

In an interview, group co-chairman Gopichand P. Hinduja said the group has hired investment bankers to find out operational and under construction infrastructure projects in road and power sector.

“We are not just looking at roads and power, but we are looking at entire infrastructure space for acquisitions," he said.

The $25-billion conglomerate committed to invest $10 billion in infrastructure in India in September 2014.

Hinduja said the group will be closing some deals shortly.

Like many other businessmen have in recent times, Hinduja expressed his disappointment at the pace of economic reforms in India.

Hinduja, who is based in the UK, said reforms are indeed happening in India “but not at the speed what we are expecting."

In 2014, a Narendra Modi-led National Democratic Alliance came to power in India. The previous Congress party-led United Progressive Alliance government was voted out for its mismanagement of the economy and a spate of corruption scandals. The expectation among businessmen was that the new government would be more business friendly.

While the government has signalled its intent, increased foreign investment limits across sectors, launched ambitious campaigns to revive manufacturing and train Indians, and put in place a transparent process to auction out national natural resources (and actually auctioned out some), many businessmen remain unhappy at its inability to steer crucial legislation through Parliament.

“I expected things to be fast. But I could not see anything. They may say that there is a special cell in the Prime Minister’s office or single window clearance for promoting businesses, but...," said Hinduja.

It is easier to invest in the US and the UK, he said, adding that the group has no plans of reviewing or scaling down proposed investment plans for India.

Modi’s overseas visits have changed the world’s view on India, Hinduja explained, but the Prime Minister also needs to focus on making it easier to do business in the country.

That’s actually been one of the government’s objectives and it has a team working on ways to move up the World Bank’s Doing Business ranking.

Last year, it moved up four spots to 130 among 189 countries compared with 134 in the previous year.

Madan Sabnavis, chief economist at CARE Ratings, said private enterprises are dissatisfied as nothing is moving on the ground.

“The government has several initiatives for creating an enabling environment for Indian corporations. However, these initiatives are not accompanied by upfront investments by the government, which is saddled with budgetary constraints," Sabnavis said.

Sabnavis said the government is also burdened with external factors including poor capital market conditions and poor gross domestic product (GDP) growth.

Africa beckons

Meanwhile, the Hinduja Group is gearing up to tap business opportunities in Africa.

“We have 10 business verticals and we will be looking at business opportunities for our 10 Indian companies in Africa," Hinduja said.

To be sure, Africa has been a favoured market for Indian companies including those belonging to the Tata Group, Bharti Airtel Ltd, Mahindra & Mahindra Ltd, and Bajaj Auto Ltd for several decades.

Indian firms have invested more than $50 billion in Africa; bilateral trade between Africa and India is expected to be $100 billion by 2015, the government said in October 2014.

Hinduja said the group is looking at participating the projects identified by Exim Bank of India.

Last year, Exim Bank set up Kukuza Project Development Co. in Africa in partnership with Infrastructure Leasing & Financial Services Ltd, African Development Bank and the State Bank of India to facilitate Indian participation in infrastructure projects in Africa.

“Focussing on Africa is a good idea as that market is touted as the next India. While Hinduja Group’s international connections might help to establish businesses in African market, it is not going to be easy to handle the existing challenges in that market going by Bharti Airtel’s experience," said Rishikesha T. Krishnan, director and professor of strategic management at the Indian Institute of Management, Indore.

Bharti Airtel had big plans for Africa and had spent $9 billion to become a global firm by buying Kuwait-based Zain Group’s telecom assets in 15 countries in Africa, the next big geography for growth for Asia’s successful entrepreneurs. But it could not succeed in that market.

Third time lucky

Hinduja hopes it will be third-time lucky for his group in India.

Hinduja Group had committed $6 billion during P.V. Narasimha Rao’s time as prime minister of a Congress minority government.

The group was unable to capitalise on economic reforms, though, and its plans came to nought.

It didn’t help that the Hinduja brothers (there are four) were named in the Bofors scandal over the purchase of guns from Sweden that saw the defeat of the Rajiv Gandhi-led Congress government in 1989. In 2005, the Hindujas were cleared of all charges.

In 2010, during the second term of the Congress-led United Progressive Alliance (UPA) led by Manmohan Singh, the group committed to invest $30 billion, but delays in approvals wreaked havoc on the plans.

Prakash P. Hinduja, chairman, Europe, Hinduja Group of Companies and brother of Gopichand Hinduja, said he was hopeful that economic reforms will take off in the coming years.

The firm hopes to conclude a few deals in the infrastructure space to push investments in India.

“Though buying distressed assets in infrastructure could be a great idea, the actual reasons for these distressed assets are not in many cases about lack of funds but clearances including fuel linkage, environmental clearance, etc," Krishnan of Indian Institute of Management said.

Another consultant, requesting anonymity, said Hinduja Group was known to deliver more talk and less action for the past few years. “But things are changing after the turnaround of two companies—Ashok Leyland Ltd and IndusInd Bank Ltd. The country is yet to see Hindujas investing more than $300 million in any venture while the group is keeping the respective governments happy by promising big investments. That said, Hindujas have money to invest though there is no clarity," he added.

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