The country’s infrastructure sector will get back to better days as the pace of asset sale increases, helping companies to slash their debt, while investments into the sector from the sovereign and other funds picks up, according to GM Rao, Chairman of the GMR group.
Speaking at a meeting hosted by the Hyderabad Management Association here on Monday, Rao said, “It will take about two years for the debt burdened infra companies to get back to their growth phase again.”
Delivering the 11th Gelli Narayana Chetty Endowment Lecture here and sharing his entrepreneurial journey, he said, “The process of asset sale, which the infrastructure companies are seeking to pursue to bring down debt, will pick up as several sovereign funds and global investors are looking to invest in India.”
The Narendra Modi Government has initiated a number of measures to improve the country’s infrastructure sector which has been passing through tough times. A number of global investors are keenly evaluating assets in the country and it won’t be long before they make investments.
Referring to the $300 million Sovereign fund deal GMR closed with Kuwait, Rao said, “A number of sovereign and pension funds are keen to make investments. It takes time to divest assets and for such deals to close as investors tread cautiously.”
He expects more sovereign funds from Middle East, including Abu Dhabi will come and invest in Indian infrastructure companies.
Everybody in the infrastructure sector is looking at reducing debt as enterprises are stressed. The change in banking norms and the access to funds at lower cost would help, he felt.
“We believe various measures initiated by the Government will help companies to be back in limelight within one or two years. India is the only country for investments. Investors are not going to China now and Europe is grappling with the refugee problem. Within one or two years you will see number of funds coming into India for investments,” Rao explained.
“Asset sale will also accelerate as funds come into India,” he said.
Earlier, he shared his entrepreneurial experience and how the GMR Group has restructured itself to ensure it becomes an institution in perpetuity.