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Ram Gorlamandala
Apr 10 2019

Australia India Private Capital Markets Update

News & Insights
Australia India Private Capital Markets Update
<p>India&#39;s growth story promises with it a huge appetite for&nbsp;many of Australia&#39;s goods and services across severals fields and sectors. That is why, strategists have placed a rather high importance in this single major market&nbsp;for Australian business, adding to the already strong and long-standing ties with the subcontinent.</p> <ul> <li>This potential makes the 2035 India Economic Strategy a required propellant, as the two countries look to forge a strong&nbsp;economic partnership, led at the highest levels of government and business.</li> <li>This ambitious plan will transform the economic landscape of Aussie/India,&nbsp;strengthening further the resilience of the Australian economy and help achieve India&#39;s aspirations.</li> </ul> <blockquote> <p>In this most recent economic strategy with India, the report mentions: &ldquo;There is no market over the next 20 years which offers more growth opportunities for Australian business than India. The targets set out in this report would see Australian exports to India grow from $14.9 billion in 2017 to around $45 billion measured in today&#39;s dollars, and outward Australian investment to India rise from $10.3 billion to over the $100 billion mark, reflecting a transformational expansion of the relationship. That is the size of the opportunity and the key lesson for Australia of India&#39;s scale, the momentum which is already built into its growth trajectory and the underlying complementarity between our two economies.&rdquo;</p> </blockquote> <p>The 3 crucial areas of focus, which is termed as &lsquo;The three-pillar strategy&rsquo; happens to be on:</p> <ul> <li>Trade and Economics,</li> <li>Geopolitical Convergence, and</li> <li>People to People ties.&nbsp;</li> </ul> <blockquote> <p><strong>Tat Capital builds on two of these three pillars &ndash; &lsquo;trade &amp; economics&rsquo; and &lsquo;people to people ties&rsquo; across both the borders, bringing in value addition to the two economies and businesses.</strong></p> </blockquote> <p>This is where the ten sectors identified by the report becomes handy in narrowing down the areas of potential for our focus regions.&nbsp;These 10 sectors [flagship sector (education), three lead sectors (agribusiness, resources and tourism) and six promising sectors (energy, health, financial services, infrastructure, sport, science and innovation)] in an evolving Indian market gives Australia competitive advantages, says the report.</p> <h4>Let&#39;s take a look at the key INDIA/AUS Investment Opportunities:</h4> <table border="1" cellspacing="0" class="MsoTableGrid" style="border-collapse:collapse; border:solid windowtext 1.0pt"> <tbody> <tr> <td> <p>&nbsp;</p> </td> <td> <p style="text-align:center">&nbsp;</p> <p style="text-align:center"><strong>Why Invest in India</strong></p> </td> <td> <p style="text-align:center">&nbsp;</p> <p style="text-align:center"><strong>Australian Strengths in the sector</strong></p> </td> </tr> <tr> <td> <p>&nbsp; &nbsp;Agribusiness</p> </td> <td> <p>&nbsp;</p> <ul> <li>Innovative Farm investment companies</li> <li>Direct to Customer marketplace&nbsp;</li> <li>Analytics + IoT driven farm management</li> <li>Newer products around rising</li> <li>Existing Food players launching digital platforms</li> <li>Leverage technology like IoT in food operations</li> </ul> <p>&nbsp;</p> </td> <td> <p>&nbsp;</p> <ul> <li>Fast, agile and high innovation potential</li> <li>Established sector with a global mindset</li> <li>World-class expertise in agri-services and land and water resource management.</li> <li>Agricultural science expertise to improve Indian food security</li> <li>&nbsp;Efficient exporter of staple and high-value products</li> </ul> <p>&nbsp;</p> </td> </tr> <tr> <td> <p>&nbsp; &nbsp;Healthcare</p> </td> <td> <p>&nbsp;</p> <ul> <li>Medical devices at India costs &amp; remote health management</li> <li>Strong infrastructure for digital health records</li> <li>Digital Pharma platforms</li> <li>Technology-driven, low-cost primary health centers</li> </ul> <p>&nbsp;</p> </td> <td> <p>&nbsp;</p> <ul> <li>Provision of healthcare in a federated system at relatively low cost</li> <li>Geography &amp; familiarity with remote-care delivery</li> <li>A vibrant medical research environment</li> <li>Expertise in developing medical coding frameworks</li> <li>Expertise in chronic disease management.</li> </ul> <p>&nbsp;</p> </td> </tr> <tr> <td> <p>&nbsp; &nbsp;Education</p> </td> <td> <p>&nbsp;</p> <ul> <li>Strong test prep platforms for job exams</li> <li>Platforms to reduce friction between opportunities and the right candidates</li> <li>Standardized and quality certification engines</li> <li>Platforms for driving internship opportunities across age groups</li> </ul> <p>&nbsp;</p> </td> <td> <p>&nbsp;</p> <ul> <li>World class vocational system</li> <li>Mobile education applications like Byju&rsquo;s for competitive exams</li> <li>Provides high-quality student experience in a safe, multilingual and multicultural society with a temperate climate</li> <li>Online education will help to reach out students in rural and regional areas</li> </ul> <p>&nbsp;</p> </td> </tr> <tr> <td> <p>&nbsp; &nbsp;Retail</p> </td> <td> <p>&nbsp;</p> <ul> <li>Technology-driven operations for the smaller stores</li> <li>Digital aggregation opportunities around specific sub-verticals in Retail</li> <li>Novel models of e-commerce like social commerce, subscriptions, etc.</li> <li>Newer multi-channel commerce models</li> <li>Newer B2B models in Retail</li> </ul> <p>&nbsp;</p> </td> <td> <p>&nbsp;</p> <ul> <li>Australia&rsquo;s clean, green brand image</li> <li>The premium value of imported brands</li> <li>India&rsquo;s openness to boutique brands</li> <li>Exclusive online channels</li> </ul> <p>&nbsp;</p> </td> </tr> <tr> <td> <p>&nbsp; &nbsp;Banking &amp; Financial services</p> </td> <td> <p>&nbsp;</p> <ul> <li>Digital first opportunities around traditional banking including credit cards, trade finance, etc</li> <li>Net new technology platforms using AI around fraud prevention, inter-bank communication, trading, underwriting, monetization, etc.</li> <li>Initiatives like GST, Aadhaar, UPI, and digitization</li> <li>Opportunities around financing for Indian SMEs</li> </ul> <p>&nbsp;</p> </td> <td> <p>&nbsp;</p> <ul> <li>Expertise in financial services non-transferable due to misalignment in target markets and goal orientation.</li> <li>Australian capital and experience have scope to partner with Indian talent to create world-class digital solutions</li> <li>End to end banking solutions</li> </ul> <p>&nbsp;</p> </td> </tr> <tr> <td> <p>&nbsp; &nbsp;Insurance</p> </td> <td> <p>&nbsp;</p> <ul> <li>Very low penetration offers significant expansion potential</li> <li>Drive profitability by going Direct to Customer</li> <li>Introduce newer points of data collection by leveraging IoT, etc.</li> <li>Boost underwriting and fraud detection using AI and leveraging cross-industry data sharing</li> </ul> <p>&nbsp;</p> </td> <td> <p>&nbsp;</p> <ul> <li>Competitive strength in General Insurance</li> <li>Success in India will require strong local knowledge and a willingness to operate on longer time horizons&nbsp;</li> <li>Sharing regulatory experience and work on setting standards with Indian policymakers could also facilitate commercial engagement</li> </ul> <p>&nbsp;</p> </td> </tr> <tr> <td> <p>&nbsp; &nbsp;Media &amp; Entertainment</p> </td> <td> <p>&nbsp;</p> <ul> <li>Opportunities in digital native vernacular content</li> <li>Crowdsourced content &amp; media platforms</li> <li>Digital first video content producers.</li> <li>Payment innovations from digital platforms like Apple and Google for emerging countries</li> </ul> <p>&nbsp;</p> </td> <td> <p>&nbsp;</p> <ul> <li>Predicted average growth rate of 2.1 percent&nbsp;in next few years</li> <li>As the entertainment sector continues to develop, there have been a host of reforms in the legal frameworks</li> <li>Changing consumer preferences</li> <li>Ongoing evolution of a new industry</li> </ul> <p>&nbsp;</p> </td> </tr> <tr> <td> <p>&nbsp; &nbsp;Logistics</p> </td> <td> <p>&nbsp;</p> <ul> <li>Digital platforms for optimal matching of transport supply &amp; demand.</li> <li>Increased collaboration between B2B logistics players</li> <li>Newer operational models leading to reduced pricing &amp; demand increase</li> <li>Leveraging AI to drive optimization of asset maintenance life cycle</li> </ul> </td> <td> <p>&nbsp;</p> <ul> <li>Can provide new investment vehicles and innovative financial instruments</li> <li>Innovation in road construction technology and materials, railway modernization and autonomous vehicles</li> <li>Access to safer traffic management technology, research, and know-how.</li> </ul> <p>&nbsp;</p> </td> </tr> </tbody> </table> <p>&nbsp;</p> <p>Asia-Pacific private equity industry set new records in deal value and exit value and achieved heavyweight status in the global PE arena. With $883 billion in total assets under management, Asia-Pacific now represents 26% of the global PE market, up from only 9% just a decade ago. As GPs compete for deals against corporate players, increasingly they are winning. Private equity&rsquo;s share of the Asia-Pacific M&amp;A market rose 6 percentage points to 17% in 2018, from the previous five-year average of 11%.</p> <p class="image-align-center"><img alt="" src=" pe mkt.png " /></p> <p>Private equity investment across the Asia Pac is higher than the recent average globally. Whilst China still remains to be a nation with maximum investment attraction, India &amp; Australia have clearly been growing at a more rapid pace than its peers in the region and are poised to be attractive destinations to invest.</p> <p><img alt="" src=" " /></p> <p>Here is quick look at the combined start up ecosystem across both the countries:</p> <p><img alt="" src=" " /></p> <h4><strong>Download the report for a full update:</strong></h4> [embeddoc url=" Private Capital markets.pdf" viewer="google"]

Comments (3)

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  • Interesting

    • 14/05/2019 11:48:54 AM
    • SB

    Informative one, Ram!