Across India’s small towns and bustling cities, retail investors have been snapping up shares of newly listed companies. It’s a boom that Blackstone Inc.’s President Jon Gray celebrates thousands of miles away in his Park Avenue office.
“For us, outside of the United States, India is the most liquid market — the easiest place to get an IPO done in the world this year,’’ Gray said in an interview. India already saw one of its biggest ever initial public offerings in recent weeks and a listing with a market value of more than $100 billion is possible from billionaire Mukesh Ambani’s empire, making the country one of the world’s busiest IPO markets.
Gray and other financial heavyweights acknowledge challenges like rising inflation and the falling rupee. Yet, between its private equity and real estate businesses, Blackstone has listed a string of companies over the past decade in India and revenue growth has been high, Gray said. The firm expects assets under management in the South Asian country to double to $100 billion in the coming years.
That’s a sign of the growing sophistication of the financial markets within this $4 trillion economy as it opens up further to foreign money. It’s also a dramatic turnaround from just a few years ago when private equity investors had limited options to exit investments in India, let alone at substantial profits. Now private equity, private credit and sovereign wealth funds are committing ever deeper pools of capital, while high frequency trading firms like Citadel Securities LLC and hedge funds like Millennium Management LLC have built a presence there. Other parts of the financial industry are also changing swiftly.
India’s markets remain a fraction of China’s by size. High corporate taxes and the rupee’s decline leave foreign firms smaller profits to repatriate into dollars. On the political front, a youth protest movement is creating new pressures for Prime Minister Narendra Modi’s government.