Morgan Stanley: India share sales to surge
Morgan Stanley’s India head expects share sales in the country to surge as companies seek to expand, and said Indian companies are poised to resume global acquisitions helped by the rupee’s strength and low valuations.
Indian companies could raise roughly $70 billion through share sales over the next three years, provided markets remain strong, Narayan Ramachandran, who has been with Morgan Stanley since 1996, told the Reuters India Investment Summit.
He also said talk of looming asset bubbles in India was “hogwash.”
“Credit growth, for the first time in India, is under depositary growth, which is why there’s no bubble,” Ramachandran, who has 20 years of investment experience, said at Reuters’ office in Mumbai.
“People don’t even know how to use the word bubble anymore.”
He also said the time was right for Morgan Stanley’s global real estate and infrastructure funds to invest in India.
“If you take a 20-year view, it will be a mega-bull-market run in real estate in India. We have to rebuild the entire real estate stock in the country,” Ramachandran said.
Morgan Stanley has invested $700 million in Indian real estate, and is looking at residential and special-use developments, he said.
Morgan Stanley separated from its former India joint venture partner JM Financial in 2007, and has gone on to build a full-service investment bank, with sales and trading, fixed income, commodities, derivatives, research and asset management offerings and 400 employees in its onshore business pay day advance.
EQUITY SURGE
Indian companies have raised $18 billion by selling new shares this year, and a long list of firms are queuing up with IPOs and secondary offerings in Asia’s third-largest economy.
By contrast, they raised $7.1 billion in all of 2008.
Morgan Stanley, which did not figure in the top 10 of the Thomson Reuters equity capital markets league table for India in 2008, tops it this year with a market share of 18.2 percent.
Ramachandran expects Indian firms to sell between $20 billion and $40 billion in equity a year for the next three years, with stake sales in state-run firms to total $10-$15 billion.
Offerings from energy and infrastructure firms would continue, and telecoms firms were set to tap capital markets to finance billions of dollars needed to build-out third-generation mobile networks in the country.
Filed under: technology by John