PE will dominate big part of Indian markets, says Blackstone senior MD Mukesh Mehta

Blackstone Senior Managing Director Mukesh Mehta believes private equity (PE) will dominate a big part of Indian markets. The deal landscape has evolved in 20 years to move towards primary buyouts, he said.“Unlike the US, UK and Japan, Indian private equity market is primary buyout dominated which indicates that the India story is just beginning,” he told CNBC-TV18’s Managing Editor Shereen Bhan in a panel discussion at the IVCA on February 11. “We are very bullish on India. India has been the firm’s best performing market for private equity over the last decade.”

Manish Kejriwal, Managing Partner and Founder, Kedaara Capital and Co-Chair, IVCA Private Equity Council, Deepak Dara, Senior Managing Director and Head of India, Ontario Teachers’ Pension Plan (OTPP), Sumeet Narang, Founder, Managing Director and Co-CIO, Samara Capital and Vivek Pandit, Senior Partner, McKinsey were also part of the panel discussion titled ‘Driving Successful Buyouts: From Vision to Value.’

“Blackstone India has $50 billion TEV since inception… Blackstone strategy is ‘don’t buy what you can’t build’,” Mehta said, while also asserting that PE will dominate big part of Indian marketsHe claimed that days of ‘buy low sell high’ are gone and that bulk of Blackstone’s returns have been through growth in companies.

Citing examples, he said, Care Hospital rose to top two listed hospital chains post its deal whereas Sona Comstar in five years became one of the largest EV Auto component manufacturer in India, Aadhar in five years is one of the largest players in affordable housing finance space.

Comparing India to the UK, Mehta asserted that India is at a 100% premium to UK markets. The stock market returns in global markets for the past two to three decades suggest that only India and the US have given double digit returns.

Reflecting on the rise of buyouts, Vivek Pandit, Senior Partner, McKinsey said that there has been increasing concentration of buyouts in three sectors — financial services, IT & BPO and healthcare. Great cash and well-managed balance sheets are some key focus areas of buyouts, he explained.