Global private equity firm EQT is gearing up for a significant expansion in its India investments, with plans to inject at least an additional ₹5 billion over the next three to four years. The firm, which manages assets worth over $250 billion, has already committed ₹2 billion in the last 10 months, focusing on the financial and healthcare services sectors. CNBC TV18’s special episode of Big Deal features EQT’s top India team discussing their investment strategy and key themes for the Indian market.
Optimism in Indian Investments:
Last year proved to be a milestone for the PE Firm in India, marked by a significant exit with CoForge’s listing on the stock exchanges. Jimmy, a representative from EQT, highlighted the firm’s continued optimism in India, emphasizing their thematic investment approach. Since 2013, EQT has been a major player in the Indian market and remains committed to the country’s growth story. In their latest fund (Fund VIII), India represents over 40% of the capital committed, showcasing a substantial focus on the Indian market.
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Thematic Investment Approach:
EQT’s investment strategy is characterized by a thematic approach, identifying key trends and seeking companies that align with those trends. This approach aims to identify businesses with robust growth potential and lower downside risk. The firm remains enthusiastic about India’s prospects, having been the largest PE investor in the country since 2013.
EQT’s Focus On Financial Services
Ashish, another member of EQTGROUP‘s India team, sheds light on the firm’s focus within the financial services sector. The PE Firm continues to concentrate on affordable housing, financing micro and small enterprises, and wealth management. While acknowledging the potential of the banking sector, EQT’s thematic buyout focus may lead them toward opportunities in affordable housing and wealth management.
Infrastructure and Growth Sectors:
EQT’s differentiated offering in infrastructure involves value-add growth rather than typical yield investing. The firm focuses on digital energy, environment, transportation, logistics, and social infrastructure. Notable platforms include O2 Power, concentrating on solar, wind, and hybrid battery solutions, and EdgeConect, partnering with Adani Group to build data centers serving hyper scalers and global cloud players in India.
Market Drivers and Potential:
Discussing key drivers for India’s growth, EQTGROUP emphasizes structural policy changes like GST implementation, investments in the digital stack (UPI, Aadhar), and the bankruptcy and insolvency code. These initiatives have unlocked India’s potential, driving the emergence of the middle class and increasing demand for services like healthcare and education.
Future Investment Outlook:
Looking ahead, EQT anticipates deploying another $5 billion in the next three to four years, building on the $2 billion committed in the past 10 months. While remaining cautious and evaluating opportunities on a case-by-case basis, EQT’s commitment reflects confidence in India’s economic trajectory.
Conclusion:
EQT’s ambitious plans to invest $5 billion in India over the next 3-4 years underscore the firm’s belief in India’s economic potential. With a thematic investment approach, a focus on key sectors, and a track record of successful exits, the company’s strategy aligns with India’s evolving market dynamics. As the firm continues to navigate the Indian investment landscape, its insights and initiatives will be closely watched, contributing to India’s position as a key destination for global private equity.