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Investing in India!

By Kailash Khandelwal

Two key issues spice up my memory of the conversation that I had with my friend, a financial planner, during a rush hour drive to the upscale Ashford Club. We were headed to attend a TiE   presentation by Anil Khatod on the growth opportunities in India - and how that translates into a long-term investment sense.

Our combined indifference to the rush-hour traffic resulted in some thoughtful discussions on why investing in India would make tremendous sense and in that context, the conversation veered towards two interesting questions: Is this boost in India fueled by software exports to USA, a pseudo growth and if yes, what happens to long term investments if in the future Indo-USA relations goes on rocks? Are the Indian polity and bureaucracy ready to shed away stubborn and obsolete policies to support a spirit of entrepreneurship? Is India too complex for a long-term investment? There were other questions too.

 

Anil Khatod

  

Anil is the right person to answer such questions - we agreed.
During the last two years at Argonaut, Anil has invested over $300 million in fifteen companies in India. He is the managing director and lead India partner at Argonaut Private Equity, a diversified global private equity fund with more than $3.5 billion under management.

His domain knowledge is astounding;  he could  accommodate a great deal of analysis with a tremendous ease and fluency. Deftly throwing open new windows to the space of financial investments, Anil backed up his presentation with data, facts and figures from major financial institutions, and most importantly, he drew on his own experiences of investing in many companies in India.

One of the points very well made dwelt on how a liberal change in government policy results in far reaching implications for the entrepreneurial  spirit of a country. The data were speaking loud and clear - how an entrepreneur- friendly climate in India has resulted in phenomenal growth rate infused with growing optimism that “tomorrow is going to be better than today”.

 

Amazing-yet-true Facts!!

  • India was the #1 private equity investment destinations in Asia last year accounting for 20% of the total investment there.
  • PE investment in India grew 246% crossing $18 billion and a spectacular ten-fold increase over last 4 years.
  • Indian infrastructure will require nearly $500 billion in investment over next five years
  • Indian stocks have delivered more than 50% annualized returns over last five years.

( As of the day of presentation Indian stock market had delivered 37% compounded annual growth over last 5 years; this number is 39% now!)

The government is planning to raise capital for investment over the next five years through “Public Private Partnership” or PPP. Due to the attractive growth conditions in India, foreign institutional investors have flocked to the Indian market. India is fast becoming an attractive destination for major venture capital and private equity firms around the globe as the venture and private equity markets in the US reach maturity.  Moreover, the interest in Indian market is fueled by a rapidly expanding economy, corporate profitability, and strong return on equity, favorable regulatory environment and entrepreneurship. Recent sharp market corrections are opening up new investment, business and employment opportunities. This is an exciting time to invest in India!!

Ignited by curiosity and interest the audience - many of them successful entrepreneurs - came up with sparkling questions in quick succession.
Considering that Anil currently serves on the boards of Koutons Retail India Limited, Argonaut Investments, Midas Communications Technologies and VKL Spices in India;  I thought of  requesting  him to share his investment experience in India on a more personal note, but the time constraint would not allow that.

How easy time flies when one is absorbed in the act of absorbing information from an engaging presentation!