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Long-term growth opportunities, combined with a short-term capital dislocation, make India a very appealing investment destination for Canadian asset manager Brookfield, which manages over $500 billion in assets globally.

“The amount of growth that we are going to see combined with the fact that we do have a short-term dislocation of capital today, make it (India) very appealing. So this is our most attractive market in the world today, and we will continue to put in more capital," said Anuj Ranjan, managing partner and chief executive of Middle East and South Asia, Brookfield Asset Management, at the Mint India Investment Summit & Awards 2020 held in Mumbai on 4 and 5 March.

India is among Brookfield’s top markets globally where it wants to put in more capital to work, Ranjan said.

“We love environments where there is a long-term trajectory that is positive and we genuinely think India has all the right ingredients to be a $5 trillion or more economy," he said.

Last year, Brookfield emerged as the largest private capital investor in India as it invested nearly $6.28 billion across private equity, infrastructure, and real estate sectors, according to deals tracker Venture Intelligence.

Its investments, including two deals totalling $5.47 billion with Mukesh Ambani-controlled Reliance Industries Ltd (RIL), catapulted Brookfield’s total investments in the country to $8.3 billion in the five-year period through 2019.

Its $3.6 billion buyout of the telecom infrastructure assets of RIL’s subsidiary Reliance Jio Infocomm Ltd was the largest ever deal in India made by a private equity investor. It also invested more than $1.87 billion in RIL’s gas pipeline assets, East West Pipeline Ltd. “You will see us being quite active across the areas that we are already in, like real estate and infrastructure, but you will also see us more active in areas such as private equity where we have recently started to foray into financial services," said Ranjan.

In January, Brookfield announced its foray into Indian financial services space by committing to invest 1,450 crore for 31.2% stake in private equity firm Everstone Capital-backed lender IndoStar Capital Finance Ltd.

“This is an NBFC (non-banking financial company) that targets retail and SMEs (small and medium enterprises), and has wound down its wholesale book. Everstone has done a fantastic job with the business over the last few years, but it is weighed down by the market being in some disarray and access to capital is not easy. If we can come in, bring some of our global expertise, some capital and partner with a like-minded partner on the ground, I think that we can really grow this business dramatically," said Ranjan.

“So we are very excited about that opportunity and there is no doubt in my mind that we will be doing more either through IndoStar or around Indostar or even just separately in the financial services space," he said.

The statement comes against the backdrop of the Indian economy facing a severe credit crunch, which has affected most businesses, especially the NBFCs that are mainly reliant on banks for capital, and real estate and infrastructure sectors which require longer tenure loans.

Credit growth has been slowing down in the country since the collapse of infrastructure lending behemoth Infrastructure Leasing & Financial Services Ltd in 2018. In the fortnight ended 14 February, the Reserve Bank of India reported that the credit growth in the banking system had slowed to 6.3% to 99.68 trillion from 93.78 trillion last year.

“Over the next 10 years, capital is going to be required in India. We are going through this short term period where there is some pain and that is usually the perfect mix—short term dislocation of capital and long term need for the business in the country, for a sector to be attractive," according to Ranjan.

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