NRI-Emirati Investors Group targeting infrastructure investments
UAE consortium to raise $1bn for big-ticket India projects
NRI-Emirati Investors Group, a consortium of UAE-based private investors, said on Monday it will raise US$1 billion for a fund that will finance infrastructure projects in India, the biggest local private fund-raising effort of its kind.
"This would be the largest such collective fund raising programme by a private group of investors generating as much $1bn for investment into big-ticket Indian projects and reflects the level of maturity of the UAE's private sector businesses," said Vipul, the consul general of India, who uses only one name.
"This also reflects the fact that India remains one of the best investment destinations that offers greater and faster returns for investors while enabling our fast-growing economy. It is heartening to see the UAE's private sector companies are shifting their focus on Indian economy, which is now one of the fastest-growing in the world."
The announcement was made at the India-UAE Partnership Summit in Dubai hosted by the Business -Leaders Forum (BLF) in association with the Indian embassy and consulate. NRI-Emirati Investors Group was formed by the BLF.
The planned fund follows on the heels of a flurry of investments in India from the UAE, including one announced this month by the Abu Dhabi Investment Authority (Adia), one of the world's biggest sovereign wealth funds, as the economic fortunes of the country improve. The IMF is forecasting that the Indian economy will grow 7.2 per cent this year, more than double the expected average for global growth.
India received $43.5bn in foreign direct investment in the 2016/2017 financial year, the highest ever, according to a report from the accounting firm KPMG.
Adia this month signed a $1bn agreement with the National Investment and Infrastructure Fund (NIIF) to invest in much-needed energy, transportation and other infrastructure-related sectors in India.
Adia, as part of the agreement, will become the first institutional investor in NIIF’s Master Fund as well as a shareholder in National Investment and Infrastructure Limited, the NIIF’s investment management company
The deal comes amid increasing interest by Adia in India and emerging markets as a whole. Adia has investments in a number of asset classes including equities and fixed income in India.
The fund is also in advanced talks with India’s GMR Infrastructure to buy up to 49 per cent of Rajiv Gandhi Hyderabad International Airport, The Economic Times business daily in India reported in July, citing unnamed sources.
The announcement by NRI Emirati Investors Group also comes following increasing ties between India and the UAE after prime minister Narendra Modi’s visit to the country in 2015.
During the visit, Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, met with Mr Modi and the two countries pledged to boost trade with each other by 60 per cent, as well as investing up to $75bn in infrastructure.
Rundown trains, roads and other basic facilities are among the biggest hurdles to investment in India.
Finance Minister Arun Jaitley has said the country needs $1.5 trillion in infrastructure over the next decade.
Since Mr Modi came to power in 2014, the fortunes of the economy have improved as the reform minded prime minister moved to cut red tape and reduce subsidies, pushing the country’s benchmark stock index to a record high.
Still, a recent slowdown in economic growth has made investment in infrastructure even more urgent in order to reach the 8 per cent annual growth rate needed to create enough jobs for the country’s 1.3 billion population.
"It is now left to the project owners, governments of various states to come up with viable projects where this amount or part thereof, could be utilized as seed funds to lift the projects off the ground and choose financial institutions and governments to arrange for the bulk finance for big ticket projects," said Azad Moopen, president of the BLF.