The private equity executive who led some of the largest buyouts for Bain Capital, such as the $20 billion buyout of Toshiba memory chip business, rebranded, later as Kioxia, believes India has the potential to show the highest growth in GDP, in the next 12 months, anywhere in the world. “Despite some headwinds on trade imbalance and current account deficit, India’s macro-economic situation is improving and is poised to structurally improve further with the China plus one strategy and the manufacturing push via PLI type programmes,” said David Gross Loh, Managing Partner, Bain Capital for Asia.
That gives a firm like Bain Capital an opportunity to deploy capital across asset classes – private equity, real estate, credit, special situations, structured financing, distressed debt and even venture or early stage investing. “If we have invested $2 bn in last 12 months, then $10 billion deployment in the next 5 years not ambitious,” he told ET in an exclusive interaction.
Loh, a Bain-consultant-turned-PE rain maker, believes India is fast catching up as global corporations adapt to a diversified global supply chain beyond China. He argues, some countries in Southeast Asia were the first to benefit, but mainly that was because they already had plants on the ground. So it was about taking their capacity utilization from 70% to a hundred percent and maybe building a bigger plant where one already existed.
In contrast, India built fresh capacities - new buildings, new facilities. “Some countries in Southeast Asia, that infrastructure was already in place and so was the government support for capital intensive industries and like semiconductors. Malaysia and Singapore for example have had pretty well developed government subsidy and support programs for semiconductor facilities. People do realise India is a huge market in its own right. So unlike many of the Asian tigers that thrive on exports in India you could be making for both India as well as the world.”
The Production-Linked Incentives, or PLI scheme -- the centerpiece of Prime Minister Narendra Modi’s economic strategy of self-reliance -- is a potential game changer feels Loh that is slowly catching on to the imagination of global CEOs. At a five-year cost of $24 billion, it’s an ambitious industrial policy push that — just like US President Joe Biden’s Inflation Reduction Act — is seeking to galvanize private investment in a mix of industries -- auto manufacturing and textiles to solar, battery and semiconductors, with the goal of creating new jobs and a whole lot of follow-on prosperity.
Read more at: https://economictimes.indiatimes.com/markets/stocks/news/if-we-have-invested-2-bn-in-last-12-months-then-10-billion-in-the-next-5-yrs-not-ambitious-bain-capitals-david-gross-loh/articleshow/94747063.cms