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Policy implementation key than just announcements: Apax

With India all poised for a turnaround, the  Union Budget 2015 to be presented by Finance Minister Arun Jaitley on February 28 needs to come out with clear cut reforms. Foreign investors are looking for implementation and not just big bang reform announcements is the word coming in from Shashank Singh, Managing Director- India of UK based private equity giant, Apax Partners.

Speaking to CNBC-TV18’s Kritika Saxena, Singh said since slowdown took two-three years for growth to come from 7-8 percent down to 4.5, it would take around two years to see a turnaround.

Moreover, with the macros showing signs of improving, the house is bullish on India, said Singh.

Below is the transcript of Shashank Singh’s interview with Kritika Saxena on CNBC-TV18.

Q: Will India see more foreign investments going forward?

A: The turnaround will take some time, I believe. This is because the slowdown took two-three years for growth to come from 7-8 percent down to 4.5 and therefore the turnaround also will take around 12-24 months.

Q: Globally Apax Fund is working out of USD 8 billion. Going forward what kind of exposure you expect India to see from that fund?

A: The Apax Funds have invested about a billion dollar of equity mainly across four transactions. So, larger deals average cheque size of USD 250 million each roughly. As the economic environment improves, our belief is that there will be more deal opportunities.

Q: Would you say that Apax will be conservative in India when it comes to investment?

A: I guess the question is how you define conservatism. I would say in terms of number of transactions for sure in terms of capital investor or capital deployed, the advantage of focusing on larger cheques means that although you do fewer deals, if they are bigger deals you probably invest as much capital or perhaps even more capital.

Q: You are not conservative on India. You are bullish about Indian?

A: Absolutely. If you look at India and Indian macro versus what is happening to growth in the rest of the world even some of the other large emerging markets, we are positive around the cycle for the reasons discussed.

Q: Investors seems to have pinned their hopes on the Budget. Do you feel that the Budget will have what it takes or rather will be able to create that platform for investors to be able to see signs of a turnaround?

A: I personally less hung-up up seeing some big bang announcement at the end of February. We need to get away also from being so focused on one event because as we know governance is not about one event or a big bang announcement. It’s about implementation.


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