DIRECT INVESTMENTS: Sovereign Wealth Funds Double Down in India in 2022

Posted on 01/05/2023

Global sovereign wealth funds increased their direct investments in India at US$ 6.712 billion in 2022 versus US$ 3.797 billion in 2021. The Sovereign Wealth Fund Institute (SWFI) tracked direct investments tabulating transactions and new security issues and excluded open market transactions and fund commitments. Direct investments signal a sign of confidence for a particular country when it comes to cross-border investments. Popular industries by size for direct investments by SWFs into India include healthcare facilities and hospitals, movies and film, asset management, and renewables such as solar and wind power. From startups to real estate, cash-rich sovereign wealth funds are thirsting to park capital in Indian companies and properties. Wealth funds are providing a level of competition against private equity firms in buying assets in the country.

Direct Transactions by Sovereign Investors in India in USD Billions

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Despite the U.S. being a core destination of sovereign investor capital, India is outshining its Asian competitor China when it comes to cross-border direct investment from SWF capital. In 2021, mainland China outshined India in direct SWF investment with US$ 4.535 billion.

Major Indian Direct Transactions by Sovereign Investors

Some notable 2022 direct investments made by sovereign wealth funds include the Qatar Investment Authority investing in Bodhi Tree. Singapore’s Temasek Holdings also increased its ownership stake in India-based Manipal Health Enterprises Private Limited. In April 2022, BlackRock Real Assets, a unit of BlackRock Inc. and Abu Dhabi-based Mubadala Investment Company agreed to invest 40 billion Indian rupees in Tata Power Renewable Energy Limited, Tata Power Company Limited’s renewable unit. Singapore’s sovereign giants continue to partake in landmark deals within India.

On the housing front, with an investment of Rs 2,200 crores through a wholly-owned subsidiary, the Abu Dhabi Investment Authority (ADIA) snagged a 20% stake in IIFL Home Finance on June 10, 2022. IIFL Home Finance, a subsidiary of IIFL Holdings Limited, is one of their many initiatives with a special focus on small-ticket loans for housing. It serves customers across 16 states and two Union Territories with branches operated by over 3,200 employees.

Active direct sovereign wealth fund investors include Norway Government Pension Fund Global (Norges Bank Investment Management), GIC Private Limited, ADIA, QIA, Temasek Holdings, and the Kuwait Investment Authority.

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