Temasek not averse to distressed assets in India

MUMBAI • Temasek Holdings is open to investing in distressed assets in India either directly or through an asset reconstruction firm, a senior executive has said.

Mr Ravi Lambah, however, added that the company has no firm plans to make such investments so far.

"We are an equity-only investor. So, if there is a business that could be a non-performing asset... which is outsourced by a bank to an asset reconstruction firm and that needed an equity infusion, we would look at it just as any other investment opportunity," the head for telecom, media and technology at Temasek International said on Wednesday.

"We are not averse to taking control of a company where we think the investment thesis works," Mr Lambah said, according to finance portal Livemint.com.

Global investors have shown interest in asset investments in India, as the country's banks try to clean up their balance sheets.

Bad loans in the country's banking sector rose to 5.8 trillion rupees (S$117 billion) as of March, a central bank review found.

The central Reserve Bank of India (RBI) has persuaded such banks to classify stressed assets as non-performing assets and set aside more money to cover the risk of default.

The RBI is also encouraging banks to resolve these stressed assets either internally or through sales to asset reconstruction companies, Livemint.com said.

If there are opportunities in the future to pick up a stake in an ARC, Temasek will look at those, said Mr Promeet Ghosh, managing director at Temasek Holdings Advisors India. "There are also funds which buy out distressed assets and we may look at them at that time. Whether they will be interesting enough for us in the Indian context, we cannot say at this point in time," Mr Ghosh said.

Temasek has invested nearly a billion dollars in India each year over the last five years, in sectors as varied as pharmaceuticals, consumer products, agri-commodities and digital commerce.

According to the Singapore firm's latest disclosures, it had a net portfolio value of $242 billion. Globally, Temasek undertook $30 billion of new investments during the year ended March 31, while exiting nearly $28 billion in investments. Temasek has also dabbled in the consumer Internet segment, Livemint.com said.

A version of this article appeared in the print edition of The Straits Times on July 15, 2016, with the headline 'Temasek not averse to distressed assets in India'. Print Edition | Subscribe