Singapore’s Temasek Holdings is looking for strategic partners as it seeks to deploy between US$3 billion to US$5 billion a year in India, betting that the country can become a top driver for growth.
The state investor is planning to hire another four to five investment professionals, bringing its India team to more than 20 people, Temasek India head Ravi Lambah said in an interview. Lambah is also the head of investment group.
The firm could commit as much as US$10 billion to the country in three years, and the deployment could be through a mix of partnerships and more capital in public equities, he said.
Temasek has been ramping up investments in India in the last five or six years, buoyed by the performance of its own portfolio, attractive demographics and increasingly deeper capital markets. The firm is doubling its investment rate annually in the country, targeting banks, financial operations, health-care, industrials, technology and consumer sectors, said Lambah. It’s also looking at decarbonisation and energy transition opportunities.
“A decade ago, could we take a US$1 billion-plus position in a listed bank in India? I think it would have been harder,” Lambah said in an interview in Mumbai. “Now we can do it over multiple companies, including banks.”
About 60% of Temasek’s investments are direct stakes, largely in financial services. The rest are mostly indirect exposure to underlying companies like Bharti Airtel through its investment in Singapore Telecommunications, and Vistara through the investment in Singapore Airlines, according to Lambah.
See also: Norway wealth fund has first underperformance in five years
“We like financial services especially banks because they’re a good proxy to economic growth,” Lambah said.
Temasek holds shares in publicly traded ICICI Bank, according to data compiled by Bloomberg. Economic Times first reported about Temasek’s plans to increase investment in India.
The US$284 billion money manager has identified four investment themes for the decade: the future of consumption, sustainable living, longer lifespans and digitization.
See also: Saudi's Public Investment Fund outpaces GIC with US$31.6 billion splurge
“India is amongst the few countries where we found opportunities that fit all the four themes,” Lambah said. The firm is more bullish on India because of the increasing savings rate, an improvement in government stability and policy consistency.
Southeast Asia has a lot of potential, but is “a harder place” because the countries are all different, Lambah said. “The key question comes down to investible opportunities really as against the country’s potential.”
Temasek remains committed to China, though big, winning bets on companies like Alibaba Group Holding are becoming scarce.
“The opportunity has changed. Geopolitics have driven that change, Chinese government’s approach to things have changed,” Lambah said.
