This positivity will not only lend a huge impact when getting more foreign businesses and investments into India, but also in improving the confidence of domestic investors. Already, in the last 2 years, a change has been witnessed in the private equity investment scene wherein investment from domestic sources has been exceeding that originating abroad. Most notably, the total private equity (PE) inflow (domestic) in 2016 crossed its peak seen in 2007.
While the total PE inflow (domestic) investment in 2015 stood at US$ 1,770 mn, it was almost double of that in 2016 at US$ 3,410 mn. The corresponding figure in 2007, which was the previous peak, stood at US$ 3,300 mn. Compare this to total PE inflow (foreign), which stood at US$ 1,540 mn in 2015 and US$ 1,850 mn in 2016. The corresponding figure in 2007, which was the previous peak, stood at US$ 4,600 mn in 2007.
Looking at this data, it can be said that that equity investment is on a return journey to India and is rising consistently in the last three years. Domestic investors seem to have realised the potential of Indian real estate aided by the improvement in India’s political and economic scenario and are investing more than ever before.
Local knowledge also makes them more confident investors than their foreign counterparts that do not necessarily get to witness all the positive changes taking place in India. With many states on the verge of setting up a real estate regulator and REITs coming up, 2017 could very well set a new benchmark as far domestic PE inflows into Indian real estate are concerned.
The author, Shobhit Agarwal is Managing Director – Capital Markets and International Director, JLL India.
Disclaimer: The contents herein is specifically prepared by ‘Dalal Street Investment Journal’, and is for your information & personal consumption only. India Infoline Limited or Dalal Street Investment Journal do not guarantee the accuracy, correctness, completeness or reliability of information contained herein and shall not be held responsible.
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