Must-know investments in India by the likes of Tesco and LeapFrog

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Ongoing investments

As the government of India opens up more sectors to overseas investment, many established global players have lined up to invest in India:

  • Tata Sons, the holding company of Tata Group, invested an initial $100 million to partner with Singapore Airlines in the launch of Vistara Airlines. Tata Sons holds a 51% stake in the company and Singapore Airlines has 49%
  • Abu Dhabi-based Etihad Airways got approval to buy a 24% stake—for 20.6 billion Indian rupees ($332 million)—in India’s biggest publicly traded carrier, Jet Airways (India) Ltd. The number of passengers in India is forecast to triple to 452 million by 2020
  • Norway’s Telenor Group got approval to invest an additional 7.8 billion Indian rupees ($129.8 million) and acquire 100% ownership of Indian subsidiary Uninor. Telenor currently owns a 74% stake in Uninor
  • Chinese telecom equipment maker ZTE Corporation plans to establish a global network operating centre in India

FDI inflows into India

 

  • Japan’s Suzuki Motor Corporation, the parent company of Maruti Suzuki, will spend 185 billion Indian rupees ($3.07 billion) to establish a new factory in Gujarat, giving a boost to the automobile sector
  • In its third investment in India, U.S. based LeapFrog Enterprises, Inc. (LF) bought a minority stake in Chennai-based financial services provider IFMR Capital Finance for $29 million
  • Britain’s biggest grocery chain, Tesco, has struck a joint venture with India’s Tata Group to invest about $140 million in a dozen Star Bazaar stores in the south and west of the country
  • Marks & Spencer’s, which operates a joint venture with local player Reliance Retail, has 36 stores in India. It has ambitious plans to operate 100 stores in the region by 2016, which would make it the chain’s second biggest market outside of the United Kingdom

The road ahead

A May 2014 ASSOCHAM (The Associated Chambers of Commerce & Industry of India) study predicts foreign investment inflows will more than double in FY 15. If foreign investors continue to show confidence in India’s new government, investment could breach the $60 billion mark.

Investments in India are key to the new government’s growth and developmental plans. Investments should also benefit ETFs (exchange-traded funds) such as the WisdomTree India Earnings Fund (EPI), the PowerShares India Portfolio (PIN), and the iShares MSCI India ETF (INDA).

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“Riding on huge expectations from the incoming Modi government, global investors are gung-ho on the Indian economy which is expected to witness over 100%increase in foreign investment inflows—both FDI and FIIs—to above $60 billion in the current financial year, as against $29 billion during 2013–14,” the study highlighted.

Strengthening prospects have also got retail biggies such as Amazon.com, Inc.’s (AMZN) Jeff Bezos bullish on India.

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