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Indian Investments Abroad

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Indian Investments Abroad

May, 2012


While Indian companies have flourished in their resilient domestic economy, they are now increasingly looking for opportunities to strengthen their foothold in foreign lands. With a motive to grow inorganically, India Inc is becoming highly transnational and trying to climb up the value chain and conquer larger share in global markets.

According to a survey by the Indian School of Business (ISB), while overseas penetration in developing or under-developed economies is majorly through greenfield investments, most of the Indian companies are adopting merger and acquisition (M&A) route to enter into developed countries. Business conglomerates under the Tatas, Aditya Birla, Reliance, M&M and Godrej account for over 60 per cent of the overseas acquisitions by value, stated the survey. The survey further pointed that the outward foreign direct investment (FDI) is majorly driven by the manufacturing sector, including petroleum, pharma and automobiles as well as non-financial services.

Recent Developments & Investments

Recent data released by the Reserve Bank of India (RBI) has stated that the Indian companies invested US$ 2.67 billion overseas across 478 deals in April 2012. Since January 2012, a total of US$ 8.25 billion has been invested by India Inc as outward FDI.

Of the total outward FDI for April 2012, guarantees amounted to be at US$ 1.77 billion while equity purchases and loans amounted around US$ 596 million and US$ 312.2 million, respectively.

Some of the April deals are discussed below:

  • Adani Port and Special Economic Zone (SEZ) invested US$ 1.04 billion through its two wholly owned subsidiaries (WoS) in Australia that are involved into construction, community, social and personal services.
  • Varun Shipping Co infused US$ 252.62 million through its joint-venture (JV) Varun Asia Pte in Singapore which is engaged in transport, storage and communication services.
  • House of Pearl Fashions made an investment of US$ 136.5 million in Mauritius through its wholly owned Multinational Textile Group while Escorts Heart Institute and Research Centre invested US$ 89.89 million in Singapore in its WoS Fortis Asia Healthcare Pte.
  • JSW Steel invested US$ 65.46 million through its JV JSW Steel Holding Inc in the US which is into manufacturing business.