India’s past, present and future urbanization is unprecedented and is likely to lead to several compelling investment opportunities, Bahrain-based alternative asset manager Investcorp said in its recent report.
India will add 360 million people to its urban areas between 2018 and 2050, estimates the report “A Different India: Opportunities from India’s Urbanization Dividend and Structural Reforms” was launched in Mumbai on December 19.
“Based on urbanization levels, India appears today to be where China was in 2000, with Indian cities already contributing 75% of the country’s GDP,” it adds.
The analysis further determines that the impact of India’s projected urbanization is 65 times more in comparison to the United States during the second industrial revolution of the 20th century.
Investcorp forayed into the India market earlier this year and is reportedly eyeing $1.5 billion growth over the next five years.
The report provides a perspective on the scale and impact of urbanization in India and analyses how the Indian economy is poised for the potential of significant growth over the next few decades, despite recent challenges.
Centre’s “transformative pro-growth initiatives” in the changing political and economic landscape is likely to provide easier access to a single economic market, which is fast approaching its entry into the top five global economies, says Investcorp.
The report highlights additional changes are necessary in corporate governance, policy clarity and stability, tax reforms for foreign investors and investment infrastructure, “before the true potential for growth from India becomes a reality for foreign investors”.
“It concludes that investment teams that seek to capture this growth will have to take a more proactive, hands-on approach to deal sourcing, portfolio management and realizing value,” adds the Bahrain-based investment manager.
“We, at Investcorp, believe that urbanization and the recent structural reforms will unlock large markets in housing, consumer tech, healthcare and financial services over the medium to long term,” said Rishi Kapoor, Co-Chief Executive Officer of Investcorp. “We are leveraging these opportunities in India by backing a new breed of entrepreneurs that are building efficient and scalable business models that meet the needs of a young, middle class, urban population by providing goods and services at an affordable price point through innovation. We remain bullish on India’s long-term trajectory,” he adds.
Mohammed Alardhi, Executive Chairman of Investcorp said, “We are committed to identifying opportunities that align with our investment thesis in India under the overarching umbrella of investing in businesses and real assets that provide access to high quality goods and services for mass market consumption.”