Blackstone investment in India: COO says India should work on quicker M&A clearances

Global private equity major Blackstone Group has said that it will investing $2 billion annually in India. Blackstone Group Chief Operating Officer Jonathan D Gray said that the Centre should adopt some measures to improve the ease of doing business for firms, including quicker approvals on mergers and acquisitions, easier privatisation of listed companies, and improvements in dispute resolution in commercial matters.

Gray suggested some reforms while appreciating the work already done by the government, including the Insolvency and Bankruptcy Code and the Goods and Services Tax.

A merger and acquisition deal takes up to two years to go through in India, while the same in its home market of the US gets done in weeks, he told news agency PTI.
 
In the case of privatising a listed entity, Indian regulations require the nod of over 90 per cent of all shareholders making a deal “mathematically impossible”, he said, adding that it is because of challenges on this front that India has 7,000 listed entities, which is double that of the US, but their market capitalisation is just a tenth of the US.

The New York-based group, operating in India for almost 20 years, highlighted Indian PE investments as their top global performer. Their realty investments, making them the largest landlord in India, have also yielded significant returns. Their success in the Indian market demonstrates their strategic investment acumen.

The firm has invested a total of $50 billion in the country till now, and the value of its assets, after accounting for the exits, stands at $30 billion. It has an investment team of 75 people based in Mumbai who scout for assets across sectors.

“One thing that can help unlock the market here is the ability to take companies private to help improve them, then bring them back to the market with more scale. It’s just one of the reforms,” he said.

There is also more work to be done on dispute resolution in matters of commercial disputes, he said, adding that all these aspects will help attract more capital into the country.

He also said that some reforms like allowing public funds to invest in real estate investment trusts — the group was a sponsor to three of the four listed REITs — can also be helpful.

The economic momentum is building in India and not slowing, Gray said, adding that this is attracting a lot of global investors into the country.

The firm has invested a total of $50 billion in the country till now, and the value of its assets, after accounting for the exits, stands at $30 billion. It has an investment team of 75 people based in Mumbai who scout for assets across sectors.

Blackstone Group senior managing director Amit Dixit said over the next five years, the value of assets is seen rising by $25 billion, including $17 billion in fresh bets and up to $7.5 billion value creation across portfolio companies, where it has already invested but is yet to exit.

Dixit said over the next five years, the value of assets is seen rising by $25 billion, including $17 billion in fresh bets and up to $7.5 billion value creation across portfolio companies, where it has already invested but is yet to exit.