Blackstone Plans $500 Mln Fund for First India Deal
June 12 (Bloomberg) -- Blackstone Group LP, manager of the world's biggest buyout fund, may raise $500 million this year to invest in India, where a slide in the stock market has made the search for possible targets easier, said the firm's country head.
Blackstone hasn't spent any of the $1 billion earmarked for India from global funds. Since it entered the country in May last year, the New York-based firm has found more attractive targets, said Akhil Gupta, Blackstone's chairman in India. A dedicated fund would commit the company to investing, he said.
Blackstone's new investment would match the amount set aside by Carlyle Group Inc. and Warburg Pincus LLC to tap into India's $775 billion economy, which the government says can grow as much as 10 percent a year. Gupta said a 22 percent drop in India's benchmark stock index since it peaked at a record high on May 10 may make valuations relative to earnings more realistic.
``Expectations have been too high,'' Gupta said in an interview in Mumbai. Now, ``people know that the rainbows they're chasing may disappear.''
The Sensitive Index, more than three times higher than three years ago, surged 93 percent in the 12 months before May 10.
The rally took the average price-to-earnings ratio of the 30 stocks that make up the benchmark as high as 25 times earnings, according to data compiled by Bloomberg. The drop has brought that to 17.7 times, while Indonesia's Jakarta Composite Index is at 16.1 times.
India, Asia's fourth-biggest economy, expanded 9.3 percent in the three months ended March 31, the fastest pace since the quarter to Dec. 31, 2003. Indonesia's economy expanded 4.6 percent in the first quarter, the slowest pace since 2004.
June 12 (Bloomberg) -- Blackstone Group LP, manager of the world's biggest buyout fund, may raise $500 million this year to invest in India, where a slide in the stock market has made the search for possible targets easier, said the firm's country head.
Blackstone hasn't spent any of the $1 billion earmarked for India from global funds. Since it entered the country in May last year, the New York-based firm has found more attractive targets, said Akhil Gupta, Blackstone's chairman in India. A dedicated fund would commit the company to investing, he said.
Blackstone's new investment would match the amount set aside by Carlyle Group Inc. and Warburg Pincus LLC to tap into India's $775 billion economy, which the government says can grow as much as 10 percent a year. Gupta said a 22 percent drop in India's benchmark stock index since it peaked at a record high on May 10 may make valuations relative to earnings more realistic.
``Expectations have been too high,'' Gupta said in an interview in Mumbai. Now, ``people know that the rainbows they're chasing may disappear.''
The Sensitive Index, more than three times higher than three years ago, surged 93 percent in the 12 months before May 10.
The rally took the average price-to-earnings ratio of the 30 stocks that make up the benchmark as high as 25 times earnings, according to data compiled by Bloomberg. The drop has brought that to 17.7 times, while Indonesia's Jakarta Composite Index is at 16.1 times.
India, Asia's fourth-biggest economy, expanded 9.3 percent in the three months ended March 31, the fastest pace since the quarter to Dec. 31, 2003. Indonesia's economy expanded 4.6 percent in the first quarter, the slowest pace since 2004.