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India Investment MarketBeat Q2 2021

Saurabh Shatdal • 28/07/2021

ECONOMIC OVERVIEW: Latest quarterly Q1-2021 GDP release shows signs of revival

Indian economy picked up in the January – March quarter with GDP growth rate of 1.6% backed by government spending and growth in manufacturing sector. Construction sector recorded a14.5% growth, an improvement over the 6.2% growth in the previous quarter. Manufacturing output grew by 6.9% during the quarter with improved capacity at manufacturing set-ups. Investment demand, measured by gross fixed capital formation (GFCF), increased by 11% as compared to the 2.6% growth in the previous quarter, with capital spending by the government picking up sharply. Private consumption increased by 2.7%, compared to the 2.8% decline in the previous quarter indicating a gradual recovery in consumer sentiments. 

INVESTMENT OVERVIEW: Opportunistic synergies and fund-raising activities on the rise 

The second quarter saw an investment volume of INR 106 bn (USD 1.4 bn). Though Q2 fund flows declined by 28.6% q-o-q, the first half of 2021 ended strong with INR 254.6 bn (USD 3.5 bn). In fact, investment volume in H1 2021 grew by a multiple of more than 4X over the previous half year. Foreign investors accounted for close to 75% share of the Q2 investments. Blackstone led the largest transaction for the second quarter with the PE major solidifying its hold in the industrial space with acquisition of Embassy Industrial Parks from the Embassy Group – Warburg Pincus alliance. The segment which is emerging very fast is continued to be looked at favorably by investors on the back of high growth of e-commerce sector. Xander Group marked its foray in east India by acquiring a logistics park in Bagnan, West Bengal as part of their industrial platform. Mapletree Logistics Trust announced the acquisition of two logistics assets in Pune with healthy occupancy with an established zone for engineering and automobile industries. 

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