KKR, the American private equity firm, plans to invest in the Indian government’s privatization program, particularly in the infrastructure sector. The firm has invested over $10bn in India so far and is looking to expand its investments in sectors such as healthcare, consumer, and technology. KKR sees India’s demographics, particularly its young population, and growing middle class, as one of its biggest strengths. The firm is also rethinking some of its businesses, such as credit and real estate, to focus on different strategic initiatives.
KKR is confident in its investment prospects in India and is looking to make large bets on businesses in sectors such as healthcare, consumer, and technology, according to co-CEO Joseph Y Bae. Since the American PE company thinks that privatisation by governments around the world is a wise move, KKR is also interested in the government privatisation initiative. Following the privatisation of Air India, other attractive assets were able to enter the pipeline, and as a result, KKR is now interested in other industrial firms and banks.
KKR began investing in India in 2006 and has so far invested over $10 billion in the country. Some of its biggest bets include Reliance Jio Infocomm, Reliance Retail, Vini Cosmetics, and JB Chemicals, among others. Bae sees India’s demographics as one of its biggest strengths, with a relatively young population and a growing middle class. He believes that GDP per capita will keep going up, and that is one of the causes. KKR is leaning toward consumer and retail, and technology adoption.
KKR’s future investments in India will focus on sectors such as healthcare – services and pharma, consumer sector businesses, and technology adoption. The PE firm will try to back leading players who it thinks are going to be the dominant businesses in decades to come. KKR has made investments in infrastructure totaling more than $2 billion so far. According to Bae, infrastructure is one of the most alluring areas to invest in right now, both internationally and in India.
While the PE firm is bullish on various parts of its business, it is also rethinking some of them such as credit and real estate, which it was doing through its balance sheet previously. KKR merged its corporate lending book with Incred Financial Services last year and is now evaluating options for its real estate lending platform. It has taken a strategic decision that it wants to exit local balance sheet businesses. The reason is that it will relaunch its real estate strategy. KKR thinks that there is a way to make better returns for its stakeholders through different strategic initiatives and it would not like to be on the local balance sheet.
