Patrick Flaherty's blog
Notes about state-owned enterprises, sovereign wealth funds and other aspects of state capitalism.
India makes it easier for SWFs
India has just made it easier for foreign funds to invest in listed companies. From Beyond Brics,
The Securities and Exchanges Board of India said investors would be allowed to buy up to 25 per cent, up from the current 15 per cent threshold, before being forced to make a mandatory bid for the target company. The regulator also raised the mandatory offer to 26 per cent from the existing 20 per cent.
I think this will lead to a huge increase in the number of SWFs investing in India. With most Indian listed companies being smaller in market capitalization compared to China, it's always been problematic for large strategic funds to invest in a suitable amount (over $100 million) without getting near the threshold. In addition, with the focus of Indian media to reap coverage on any fund that comes close to the magic 15% number, SWFs or any fund were hesitant to go above 10% stakes.
With Temasek already being quite active in the country and currently sitting on a fair amount of cash from their recent disinvestments from Bank of China and Agricultural Bank of China, I fully expect the Singaporean SWF to start making waves.
Patrick Flaherty a freelance researcher on sovereign wealth funds, state-owned companies and state capitalism. His email address is flahertypj@gmail.com and at @thatpolicyguy



Comments
Post new comment