Dubai firm, LIC subsidiary sign deal

Mi Capital, Dubai-based Mi Capital, a financial institution dealing in corporate finance, capital restructuring, mergers and acquisitions has entered into a partnership with, India’s Life Insurance Corporation Housing Finance Ltd. Asset Management Company (LICHFLAMC).

LICHFLAMC is a subsidiary of LIC – India’s largest insurer and financial institution with US$386 billion worth of Assets Under Management (AUM).

“With Indian economy growing at more than 7.5 percent per year, it is a good time for Gulf investors to look at the excellent opportunities offered by the growth of the Indian economy,” Sheetal Soni, Chief Executive Officer and Managing Partner of Mi Capital, says.

He was speaking at the India Investment Meet in Abu Dhabi, supported by Abu Dhabi Chamber of Commerce and Industry and attended by Indian Ambassador Navdeep Singh Suri. Officials of Mi Capital and LICHFLAMC also addressed investors at a seminar organized with the support of the Business Leaders forum (BLF) and attended by Sumathi Vasudev, Acting Consul General of India.

Officials said investment in infrastructure, healthcare, affordable housing, education and logistics could be channelled through private equity and co-investment opportunities that significantly mitigate the investors’ execution risk in still considered complex Indian market.

Total private equity deal value in 2017 rose US$9.6 billion higher to $26.4 billion in 2017 compared to $16.8 billion in 2016, the highest ever in India. The investment value increased 57 percent, according to the latest Bain & Company report.

India’s median deal multiples value reached a record high—higher than Asia-Pacific’s. “[The year] 2017 was the best year for exits, which should signal confidence for investors. The total exit value grew by more than 60 percent to $15.7 billion, while the number of exits increased 7 percent,” the report said. The top 10 exits together constituted 40 percent of total private equity exit value in 2017, slightly less than 2016 (45%).

The growth is also driven by the  Indian Government’s drive to clean-up and modernise its economy as well as the country’s infrastructure and housing sector. Urban India today houses 377 million people, constituting 32 percent of the country’s population, with an annual addition of 8 million as per Census 2011. This is further estimated to increase to 40 percent with a population of close to 600 million living in the urban centres by 2030.

The Indian real estate market is expected to touch US$180 billion by 2020. Housing sector is expected to contribute around 11 per cent to India’s GDP by 2020, according to a report.

LICHFLAMC has invested and existed in five opportunities mainly invested in mid-income housing with very high IIR – in some cases shooting to 114 percent, says Dinesh Pangtey, CEO of LICHFL-AMC. “This provides one of the largest opportunities for investors globally,” he said.

The Indian real estate sector has witnessed high growth in recent times with the rise in demand for office as well as residential spaces. Private equity investments in real estate are estimated to grow to US$100 billion by 2026 with tier 1 and 2 cities being the prime beneficiaries.

Private equity investments in Indian real estate increased 15 per cent year-on-year in January-March 2018 to Rs165.3 billion (US$ 2.56 billion). According to data released by Department of Industrial Policy and Promotion (DIPP), the construction development sector in India has received Foreign Direct Investment (FDI) equity inflows to the tune of US$24.67 billion in the period April 2000-December 2017.

 

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