2 India Investment Overview
The global economic landscape has been witnessing lacklustre growth due to a slowdown in China coupled with falling
commodity prices. However, the investment scenario both in developed and emerging economies continues to attract
investment interest and dominate the investment activity.
As per AT Kearney¡¯s Global FDI Confidence Index 2015, investment activity was mainly driven by the United States, China
and European Countries. China, Japan and India were amongst the most attractive investment locations, followed by
leading economies of South East Asia. Additionally, as per EY Attractiveness Survey 2015, 32% of international investors
ranked India as the most attractive market, while 60% placed the country among the top three investment destinations.
The report also indicated that those who have established their business in India were more confident about the countries
investment attractiveness. Moreover, top business leaders find India¡¯s macroeconomic and political stability, FDI policy and
ease of doing business more attractive in CY2015 as compared to CY2014. HSBC Global Research¡®s ¡®The Great Migration¡¯
also projected a shift in FDI inflows from China to India and other countries such as Indonesia and Vietnam primarily due
to the higher labour costs and currency appreciation.
India has attracted FDI investment worth US$408 billion
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( 26,724 billion) from April 2000 to December 2015. This includes
FDI equity inflows worth US$277 billion
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( 18,206 billion), reinvested earnings and other capital. The FDI equity inflows
into India stood at approximately US$29 billion
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( 1,910 billion) from April 2015 to December 2015, while the inflows for
FY15/16 are likely to be above the level of US$31 billion
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( 1,891 billion) of FY14/15. The Government has recently eased
FDI norms across fifteen sectors including defence, banking, construction, single brand retail, broadcasting, civil aviation,
etc. This is aimed at improving investor sentiment and further encourages foreign investment into the country.
2.1 Private Equity Investments in Real Estate Sector
Post the global economic slowdown in 2008, developers in India faced difficulty with project funding. With increasing
cost of borrowing, developers were exploring alternative funding channels and to meet the increasing need for capital,
developers started partnering with private equity funds. Since then, private equity project funding has gained visibility in
the Indian Real Estate space.
Private equity funding in real estate, picked up pace in FY12/13 and had witnessed strong growth since then. During the
CY2015, the real estate sector along with consumer technology and BFSI were top sectors to attract private equity funding.
Real estate sector witnessed an increase of 31% in private equity investment in the CY2015, in comparison to last year.
Foreign private equity space was dominated by players such as Government of Singapore Investment Corp. Pte Ltd
(GIC), a sovereign wealth fund, Blackstone Group LP and Warburg Pincus LLC. Among the domestic funds, Piramal Fund
Management Pvt Ltd was one of the biggest investor.
6
Source: Department of Industrial Policy and Promotion (Exchange Rate 1US$ = 65.5)
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ASCENDAS india trust ANNUAL REPORT
2015/2016
