Mumbai: Global private equity main Black stonewhich manages $1 trillion in assets, plans to invest $25 billion in India over the next five years.
Blackstone Chief Operating Officer Jonathan Gray said here that India was the third largest investment destination for Blackstone after the US and UK. “The fact that you have had a lot of growth but not had a lot of capital creates the opportunity to produce higher returns,” he said.
The company has been encouraged to make greater investments in India as previous bets have borne fruit. Furthermore, with $200 billion in “dry powder”, the company sees India as a great opportunity, taking into account the slowdown in advanced economies, global companies diversifying production, developed equity markets that provide a route exit and the prospects for new reforms. “If we look at stock market returns over the last 10-20 years, the US has been number one in dollar terms but India has been number two. India has become a place where more and more global investors are concentrated. It seems to me that the momentum is increasing, not decreasing,” Gray added.

He said: “The big question mark that investors have had historically is: will I get liquidity? The private market was quite weak, especially for large assets. There was a certain leap of faith that it would be possible to exit through the public markets. This was worth it. I think this has really given global investors confidence that there is liquidity on the other side.”
The $25 billion increase in asset value will include $17 billion in new investments and $7.5 billion in gains across its portfolio, with Blackstone bringing in $2 billion in new capital every year, Amit Dixit said , head of the company in India.
“Our focus is on the rising middle class and the sectors impacted by this transition,” Gray said. “Building businesses that build India is Blackstone’s core theme,” she added.
Gray sees room for reform in the M&A space. “On the M&A front, in the US, it takes 51% of shareholder votes to buy a company and take it private, while in India it is 90%. Some other countries are in an intermediate position, so the threshold is much lower than 90%. When a company faces financial challenges, we want these companies to be able to exit the public markets and for this capital to be recycled in a rational way,” he said.
Similarly, in the US, a merger can be completed in several months, unlike the several years it takes in India. Gray also feels there is a need to synchronize with the rest of the world when it comes to regulations for real estate investment trusts to allow more investors and regulate them on par with other investments.
The company, which is the largest owner in the country, has real estate portfolios in offices (Nucleus Office Parks), retail (Nexus Malls), logistics (Horizon Industrial Parks) and data centers (Lumina CloudInfra). In terms of equity, Blackstone focuses on acquiring control and modernizing companies. Recent highlights include the acquisition of CARE Hospitals (with KIMS HEALTH), the transformation of Sona Comstar into India's largest EV automotive components company with an IPO in 2021, the transition of IBS Software to a SaaS provider and the transformation of Mphasis in a global cloud migration leader.