Singapore’s state investment arm Temasek, which has seen its India portfolio grow to $11 billion, is looking to deploy more capital in India, even as the firm has slowed down investments globally, a senior company executive said.
The investment firm’s India portfolio stood at $11 billion as on 31 March 2019, compared to nearly $10 billion a year ago. “It is our intent to deploy more capital in India. We would like to increase our exposure. The billion dollar a year that we have been putting for the last five years has been great. But if we can do more, we would want to do more," Ravi Lambah, head of India and global head of telecom, media and technology at Temasek, said in Mumbai on Thursday.
“We have been in a net cash position for almost a decade on our balance sheet, which means we have more cash on our balance sheet to deploy than we have been able to find opportunities for. We are not targeting a specific number, but in the next five years, if we are not substantially more than what we are now, we will be disappointed because we do see India as an attractive destination for our capital," he added.
For the year ended 31 March, the firm moderated its investment pace globally, divesting more at $21 billion than the $18 billion it invested during the year. However, in India the trend was the opposite, as it grew its exposure to 5% in the country in FY19, as compared to 4% in the previous fiscal year.
In FY19, the Singapore firm invested $400 million in the National Investment and Infrastructure Fund (NIIF), a fund set up by the government of India to boost infrastructure financing in the country. It also bought stakes in AU Small Finance Bank Ltd, Ascendas India Logistics Programme, Adani Ports and Special Economic Zones Ltd, and payments technology firm Pine Labs.
The firm, Lambah said, would continue to focus on the consumption theme in India and all sectors that feed into that theme, such as financial services, technology, healthcare, infrastructure, retail and fast moving consumer goods.
Within the financial services space, in which Temasek has the highest exposure in India, banking and insurance are likely to see more investment activity from the firm.
“Banking is a space we like," said Lambah. “We are currently invested in that space and, if we find the right construct, we will invest more in banks because we think well-managed banks are great proxies for economic growth. We are open to looking at all these opportunities as they come around. It really comes down to valuation and how we think about the opportunity compared to everything else we see," he said.
The firm is also bullish on technology and healthcare, focusing on companies supporting the consumption story in India.
On the technology side, Temasek invested UST Global, a digital solutions provider, and ride-hailing company Ola Cabs. In healthcare, it invested in Dr Agarwal’s Eye Hospital.
“We really are bullish on all three because we think they play very well to the consumption theme in the country. You cannot have growth without financial services growing, technology is important as it is enabling every sector and healthcare is an essential. So we are focusing to find more in all these three spaces, and more," said Lambah.
