After committing $2B investment, Blackstone pushes for regulatory changes

Blackstone Inc. expects dealmaking to remain strong in India, its third-largest business globally, even as it pushes for regulatory changes to make it easier to operate in the country.

The Indian government had taken several steps to ease doing business, including introducing a goods and services tax and changing bankruptcy laws. Steps such as these have allowed firms like Blackstone to gather nearly $50 billion of assets under management in the country, President Jonathan Gray said.

Some more changes in regulations for delisting companies from public bourses, shortening the process for mergers and acquisitions and faster dispute resolution would make it “incrementally, even easier,” he said. “They raise the value of businesses, they allow more capital to come in and it really facilitates this virtuous cycle.”

The $1 trillion manager plans to make new investments in logistics and data centers in its Indian real estate portfolio. In private equity, it would seek value-added exporters, and healthcare, financial services and travel-related companies, which serve India’s rising middle class, Gray said at a media interaction in Mumbai on Wednesday. Energy transition is also an area in which Blackstone hopes to make more investments.

Blackstone’s Indian private equity portfolio has generated the highest returns firmwide, and it plans to deploy about $2 billion annually for the next five years in the country, according to Amit Dixit, head of private equity in Asia.

Blackstone’s Indian private equity portfolio has generated the highest returns firmwide, and it plans to deploy about $2 billion annually for the next five years in the country, according to Amit Dixit, head of private equity in Asia.

Delisting remains a challenge in India as companies need 90% of shareholders to vote on the proposal. “Basically, that’s a mathematical impossibility,” Gray said. Taking private in the US requires a 51% majority and for other countries it was lower than 90%, he said.

“It’s a healthy part of a system when a company that is under managed or has financial challenges has the ability to exit the public market and the capital gets recycled in a rational way,” he said.

Similarly, the process for mergers takes between 18 to 24 months to complete in India, much longer than it takes in the US and Europe, according to Gray. Bloomberg