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Indian Investments Abroad

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Indian Investments Abroad

November, 2011

Brief Overview

Indian companies or entities are on a continuous look-out for new investment destinations (markets and resources). Recent data released by the Reserve Bank of India (RBI) shows that overseas investments by Indian companies rose by 51 per cent to US$ 3.46 billion in September 2011 from US$ 2.28 billion in August 2011. Outward investment by India companies or entities was at US$ 19 billion for the first six months of 2011-12.

Indian Investments Abroad: Recent Developments

Liberalised overseas investment policies have given enough room to Indian corporates to invest abroad and make their presence felt globally. Some of the overseas investments that took place in the recent past or that would fructify in near future are discussed hereafter:

  • Fortis Healthcare (India) will acquire Singapore-based Fortis Healthcare International for US$ 665 million. The deal, subject to regulatory approval, is expected to close by mid-December 2011.
  • State-run company Gas Authority of India Ltd (GAIL), India has plans to spend around US$ 1 billion over 2012 to explore fast-emerging shale gas sector, primarily in the US and Canada. Corresponding deal is expected by April-May 2012. The company acquired 20 per cent stake in Carrizo's Eagle Ford shale asset in America in September 2011 and would spend US$ 300 million to develop the same.
  • Coal India - World's largest coal producer, is in discussions with the US-based Peabody Energy and Massey Energy for stakes in the mines owned by these companies, while steel major Steel Authority of India Ltd (SAIL) along with NTPC, Coal India, Rashtriya Ispat Nigam Ltd (RINL) is exploring opportunities to acquire coal mines in Australia and other coal-rich nations by forming a joint venture (JV) company - International Coal Ventures Ltd.

Overseas Investments

As per the recent RBI data, Indian companies carried out as much as 401 overseas investment transactions that resulted in outward foreign direct investment (FDI) of US$ 3.46 billion during September 2011. Some of them are:

  • GVK Power has infused US$ 1.41 billion in its Singapore-based JV -- GVK Coal Developers (Singapore) which is engaged in the business of transport, storage and communication services.
  • ETHL Communications Holdings has committed US$ 776.88 million in its Mauritius-based wholly owned subsidiary (WoS) - ETHL Communications Mauritius, which is engaged in financial, insurance, real estate and business services.
  • Tata Steel invested US$ 173.55 million in its Singapore-based WoS, Tata Steel Asia Holdings Pte, which is also engaged in financial, insurance, real estate and business services.
  • RHC Holding investments invested US$ 113.62 million in its WoS based in Mauritius.
  • Furthermore, Jindal Saw invested US$ 78.64 million in its Cyprus-based manufacturing WoS -- Ralael Holdings Ltd. Besides, the Indian company has also committed an investment of US$ 48.31 million in its UAE-based WoS Jindal Saw Holdings FZE. The WoS is engaged in manufacturing activities.