Having fulfilled its commitment to raise its yearly investment in India by 3x last year at a record $3 billion, Singapore investment firm Temasek is confident of investing a further $10 billion over the next three years at the current run rate.

“We had said $9-10 billion last year over a three-year period and to that extent we were able to deploy $3 billion last year. We are hoping to deploy again $10 billion over the next three years with a similar run rate,” Mohit Bhandari, Managing Director, Investments (India), told businessline.

India, which now makes up 7 per cent of Temasek’s global portfolio, has been the firm’s best-performing market globally over the last decade and as on March 31, 2024, its India exposure, on a mark-to-market basis, was $37 billion.

Bhandari did not specify the returns that its Indian investments had generated but said, “we are proud of the returns we have delivered, and we will look to maintain or improve it.” He added that investments in India had significantly outpaced divestments, “and that’s simply because we are finding more opportunities to deploy so that pace of investments is exceeded.”

Increasing investments in India

Temasek’s exposure to India has been stepped up as the outlook for the economy is strong. The availability of entrepreneurial talent, the quality of management and levels of governance were factors contributing to the high levels of optimism with respect to India, Bhandari said.

Financial services, healthcare and technology consumer are the sectors where the firm will have a continuing focus. “Our long-term focus continues and there’s no point in stepping away.”

Last year it invested more in portfolio companies Lenskart and Country Delight and maintained its 10 per cent stake in Tata Play.

The financial services sector constitutes a large part of its portfolio in India, with around 11 companies, including the National Stock Exchange. Healthcare is another significant sector, with a mix of hospitals and diagnostics firms. Bhandari said it was looking for more opportunities to invest in the healthcare sector, especially medical equipment and pure-play drug manufacturers.

Some of the emerging areas that Temasek is looking at are artificial intelligence and space technology. Bhandari said India had the potential to emerge as a leader in space technology, especially in the use of satellite communications. India ranks among the handful of companies with the capability to launch satellites at very low cost.

Valuations

Concerning  rich valuations in certain segments of the Indian economy and Temasek’s investment thesis, Bhandari said the trade-off was between returns and deployment. “We can’t compromise on returns.. I think deployment will have to take a backseat,” he explained in relation to pockets where valuations had run up.

In FY24, one of Temasek’s biggest investments in India was Manipal Hospitals, where it acquired an additional stake for $2 billion. Bhandari said the effort was to remain focused and drive larger transactions. The Indian market had deepened, and there were more opportunities.

“The economy has become bigger, the companies have become bigger. I think promoters also see value in onboarding financial investors.”

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