While foreign institutional investors (FIIs) such as portfolio and hedge funds are already betting big on India, the country’s growth opportunity is also increasingly compelling for pension and provident funds, says a veteran private equity executive who has raised a $1.5 billion fund focused on India.
Parag Saxena, co-founder and CEO of Vedanta Capital, told Hindustan Times on the margins of the ‘India @60’ conference organised by the Ministry of Tourism and the Confederation of Indian Industry in New York, that there was no democracy in the world to match India’s growth potential, in which industrial growth is expected between 8 and 10 per cent.
"India offer tremendous opportunities with very limited risk as against the other markets,” said Saxena, who has been associated with coffee brand Starbucks and leading biotech company Amgen.
Saxena, who has launched $ 1.5 billion fund for India — New Silk Route (NSR) — feels India will continue to give “ a phenomenal return” as it has given in the last couple of years. NSR raised $1 billion in February this year and is expected to raise another $500 million under the same fund before October. Of this 70 per cent is earmarked for India and rest 30 per cent for the other markets
According to Saxena, the private equity players will continue to get upwards of a 25 per cent return from the Indian market. The challenges for India are how to compete with other BRIC (Brazil, Russia and China), which also offer tremendous opportunities, he said. The government needs to create an environment to promote investments in terms of a better infrastructure and better law and order, he said.
“Given the opportunities, the momentum of dollar inflow as foreign direct investment or as portfolio investment will continue to increase significantly,” he said.