Source: TNN
The country’s private sector projects, national monetisation pipeline, and vibrant investor ecosystem contribute to its appeal as a top market in Asia.
India is turning out to be one of the biggest markets in Asia for infrastructure financiers, according to KKR, a US-based private equity giant.
KKR plans to deploy a major chunk of the $6.4 billion Asia Pacific Infrastructure Investors II fund that it closed earlier this month in India.
“India is probably the deepest market for infrastructure in Asia because there is so much infrastructure build happening, and a lot of it is in the private sector, and the government has the national monetisation pipeline which brings a lot of public sector assets into private hands on a 20-30-year basis,” said Hardik Shah, a partner in KKR’s infrastructure team in India.
The group’s investments in India are currently at an all-time high. “KKR has been an investor in India for close to 20 years, and our investment, which stands at upwards of $10 billion, continues to ramp upward,” said Shah. Of the $10bn, $3bn is in infrastructure. “Of our infrastructure funds, one-third are in roads, another one-third in renewables, and the rest in everything else,” said Shah.
He added that the sector has matured in the last 15 years, and there is a fair amount of certainty and what you see is what you get. “Finally, the ecosystem is in place with a vibrant ecosystem of different types of investors including InvITs, private equity funds like ourselves, and direct investors who want to invest in infrastructure,” said Shah.
Shah said that India is one of the top markets for KKR in Asia. “The top five are India, Korea, Japan, South East Asia, Australia, and New Zealand,” He added that China has not been the focus of this fund as in China infrastructure.
KKR has invested an additional $250 million in Serentica Renewables – a decarbonisation platform which it acquired for $400mn earlier. A KKR-backed InvIT picked up 12 road projects for Rs 9000 crore last month, and last year, KKR acquired the majority stake in LEAP India – a pallet pooling platform.
Meanwhile, a report by KKR’s chief investment officer said that India is likely to contribute a fifth of the global incremental growth for the next five to seven years. The report estimates $4-$5 billion of annual infrastructure transfers from the government to the private sector, adding an efficiency edge to the growth.
“India could be one of the largest investment arenas to deploy capital in Asia over the next five to seven years if the country continues to stay the course on its current reform-minded path,” said Henry H. McVey, KKR’s balance sheet CIO. McVey was in India to do an on-the-ground check of the investment climate after the close of the $6.4 billion fund.
