Blackstone plans up to $720m annual commitment to India
The Blackstone Group is considering a $500-720 million annual injection into India over the next few years, said Akhil Gupta, the firm's chairman and managing director for the country. He added that the firms has invested nearly $1.8 billion in the market since 2006.
That figure makes Blackstone among the most active private equity investors in India, Reuters iterated. Gupta added that, as part of this plan, the firm may complete five or six deals annually within the range of $100-120 million apiece.
Blackstone has predominantly focused on infrastructure plays in the market, and has developed a bullish view on energy. The firm spent $800 million on power-related companies since 2006, and most recently closed its third energy deal in July, paying $111 million for a 25.2% stake in Visa Power.
In August 2010, Gupta said the private equity firm "would not hesitate" to invest $1 billion in the country's power sector if attractive deals presented themselves, given that the power sector fits in well with Blackstone's stated objective to target opportunities related to infrastructure development and domestic consumption in India.
However, there are signs that other investors' interest in the sector may wane. In a separate report, Reuters noted that difficulty in obtaining approval for land purchases and coal supplies have made the energy sector fickle for private equity, despite the growth opportunities. In order to sustain India's 9% GDP growth, the country will need more than 75,000 megawatts of energy over the next five years, the government has estimated. That will cost approximately INR11 trillion ($210 billion), of which half will come from the private sector, the newswire added.
Energy has played a key theme in India's investment landscape in 2011. A report released by Venture Intelligence last month found that the largest transactions from January to September in India include Blackstone's $261 million investment in SKS Chhattisgarh Power Generation; Blackstone's $111 million investment in Visa Power; and Goldman Sachs' $204 million commitment to ReNew Wind Power. The research firm found that, in the third quarter of 2011 alone, energy attracted $823 million across 16 transactions.
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