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Business News/ Companies / News/  ‘India is Blackstone’s 2nd biggest market outside US, holds strong fundamentals’

‘India is Blackstone’s 2nd biggest market outside US, holds strong fundamentals’

Gray believes that the recent episode of sharp stock price erosion in one of the largest conglomerates in India will not be a long term impediment to investor interest in India.

Jonathan Gray, president and COO of Blackstone. Premium
Jonathan Gray, president and COO of Blackstone.

MUMBAI : Global private equity major Blackstone, which has a portfolio of $50 billion in India, sees the Indian economy continuing to grow faster than the rest of the world and plans to double down on its investments in the country, already its second biggest market outside the US, said Jonathan Gray, president and chief operating officer of Blackstone.

Gray believes that the recent episode of sharp stock price erosion in one of the largest conglomerates in India will not be a long term impediment to investor interest in India.

“Outside of the United States, if you look at our equity businesses, the number one country would be the UK and the number two would be India, which tells you that Blackstone believes a lot in India. The fundamentals here for long term growth are outstanding: young population, hundreds of millions of people who speak English, more engineers than anywhere else in the world, a very low cost place to do business, entrepreneurial people and a government now that is oriented towards growth. And we believe as more infrastructure comes into this country, it can continue to grow at a much faster rate than the rest of the world," said Gray at a media roundtable in Mumbai on Tuesday.

Gray added that in private equity, the firm has seen the highest returns in the world from India and it has also seen extraordinarily strong returns in real estate as well.

“And so when you have success in an area, you tend to double down. We look at India as a place that has a very bright future in terms of growth. And we are very well situated at our scale," he said.

Gray added that Blackstone, which has largely focused on buyout or control transactions, intends to grow its India investments in newer areas such as growth investments and is also excited about opportunities in infrastructure.

“We’ve done one deal in our growth equity space Xpressbees, which is in the e-commerce area. Because of all the entrepreneurship, technology strength, we think growth would be a natural place for us to expand. I see infrastructure/ energy infrastructure as a very interesting area here. Obviously, India needs more transmission,and it certainly can take more advantage of its strength in solar. So, I think some of our energy and infrastructure practices could come here," said Gray.

While almost 50% of Blackstone’s Asia fund has been invested in India, Gray said currently the firm is not looking at setting up a dedicated India fund.

“I think it’s possible over time that we could create sub-funds, if India grew to be so large, where we might have parallel vehicles," he said.

“But for now, we like the flexibility of being a pan Asian investor and at our scale we can still do a lot of business in India even if it’s part of a larger fund. So as of today I don’t see a dedicated India strategy," he added.

When asked about the concerns of global investors on the recent episode at Adani group, which has seen an erosion of trillions of investor wealth in the span of a couple of weeks, Gray commented that the episode will raise the bar and improve corporate governance standards of India Inc.

“Investors want to know if corporate governance is appropriate; is there transparency? Their questions will be about what this means for the Indian market. There are pains at times with a country that’s moving from sort of early emerging market status to something more mature. I think because investors have seen so much success generated by our investments here, our investors have not lost confidence, but they obviously ask questions when something’s on the headlines in the newspapers every day," he said.

Gray said he does not view the recent events as a long term impediment for India.

“If anything, when these things happen, it just raises the bar for everybody and forces people to operate at a certain standard and so over time, India will continue to make progress in this area. And as it does so, it makes it easier for the capital to come," he added.

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Swaraj Singh Dhanjal
" Based in Mumbai, Swaraj Singh Dhanjal is responsible for Mint’s corporate news coverage. For the past eight years he has been writing on the biggest deals in private equity, venture capital, IPO market and corporate mergers and acquisitions. An engineer and an MBA, he started his journalism career in 2014 with Mint. "
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Published: 14 Feb 2023, 11:23 PM IST
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