Extract: AFR Article by Joyce Moullakis
Australian companies are laggards when it comes to executing mergers and acquisitions and other expansion opportunities in India, according to boutique adviser Tat Capital.
The mid-market cross-border advisory, family office and foreign exchange firm has a view that Australian companies have a predisposition to look at growth options in China and other parts of Asia, despite India's vast population and stellar growth rates.
India has now pipped China as the world's fastest growing economy, buoyed by tumbling global oil costs. While some have questioned the sustainability of the growth rates and pace of economic reforms, Tat's co-founders, Ram Gorlamandala, Pras Indrakumar and Lasanka Perera, believe the opportunities for greater levels of cross-border activity are significant.
The firm, set up in 2013, focuses on deals and investments that span Australia, New Zealand and the Indian subcontinent.
Official Press Release
Australian businesses missing opportunities in India – Tat Capital
Tat Capital, advisors behind the recent announcement of the binding share purchase agreement between Wavetronic (Soon to be renamed Prognos Solutions Limited) and Orpheus Energy Limited (ASX:OEG) on the ASX, have partnered with the ASX & S&P Capital IQ to educate Australian businesses on a huge opportunity they say is being missed – India.
The firm, which encompasses advisory, Family Office and FX, is focused on cross-border trade between the Indian subcontinent and Australia/New Zealand. Co-Founder and Director Lasanka Perera said while other developed economies have been investing in India for some time, Australia is lagging behind.
“As a nation we’ve been so focused on China for the past 20 years that we’re missing the huge potential that India has to offer,” he said. “In the present climate it’s the perfect time for us to look to where the next ‘China’ will come from. We are very certain that is India. There are very compelling demographic, political and economic reasons to look more seriously at enhancing our economic relationships with India to build a more robust, diversified and energetic regional strategy.”
Tat Capital Co-Founder and Director Ram Gorlamandala said Australian businesses wanting to sell products and services offshore should put as much or more emphasis on having an India strategy as having a China strategy.
“India is the world’s fastest growing large economy with one of the youngest workforce in the world. Australia and India share many commonalities in the mid-cap space,” he said. “In both countries the mid-market wields a lot of economic power, and is where some of the biggest growth opportunities lie. Both Australian and Indian entrepreneurs have a strong appetite for innovation. It’s the ideal time for leaders from the growing companies in these regions to come together and create a bigger Australasian strategy. The Australian multicultural society is in many ways similar to diversified sub cultures in India, both of these nations have adopted many innovative business strategies over time to service their diversified multicultural customer base.”
With a view to bridge the gap of innovation and entrepreneurship across these countries, Tat Capital has signed an MOU with T-Hub, one of the largest incubators in India. The MoU will connect T-Hub's start-ups with Australian growth companies to explore acquisition, partnerships and strategic investment ideas. It will also give T-Hub's start-up and VC community access to Australian VC, private equity and family office investors to cross-pollinate ideas, technology and capital.
Gorlamandala added that India’s rapidly changing business and political landscapes also encouraged the development of new trade relationships.
“The new Government is very focused on getting rid of corruption and red tape,” he said. “There are five official policy pillars encouraging financial inclusion; entrepreneurship; manufacturing; environmental improvement and digital business. I think in many ways Australia has an outdated image of India as the world’s call centre but that view is 20 years old now. The India of 2016 is almost unrecognisable to that of even five years ago.”
Co-founder Pras Indrakumar, who runs Tat Capital’s Family Office business, said India and Australia and New Zealand offered one another very significant investment opportunities in a relatively greenfield landscape.
“There is huge family office interest in Australia and New Zealand from India, and vice versa,” he said. “We facilitated a deal last year around a product that originated in New Zealand, which created a lot of excitement in India, from market entry and investment perspective. There is massive opportunity for companies looking for investment, and for investors looking for growth opportunities. If Australia would put in the work required to mature the relationship I believe the benefits would be rapid, and very significant in capital terms.
The Wavetronic deal marks Tat Capital’s seventh deal since their inception in 2013. Recent projects include:
- A Wellington-based sports technology company. Tat Capital facilitated two rounds of capital raising – a pre-strategic raise in Family Office funds, and a strategic investment round from private equity. The technology is now used in 44 countries.
- FOX Studios Entertainment Quarter. Tat Capital brought in two of the six syndicate members to fund this deal to buy the leasehold of the Entertainment Quarter at Moore Park in Sydney.
- Shah Rukh Khan Australia and New Zealand tour. Tat Capital, along with NSW State Government and a Pakistani family office based in Australia, funded the tour of India’s “King of Bollywood” star to Australia and New Zealand.
- Independent Reserve, Australia’s number one Bitcoin exchange. Tat Capital raised funds from Family Offices to establish and grow the exchange.
Tat Capital is hosting Australian businesses on a business, investment and cultural tour to Hyderabad in April this year, in association with S&P Global Market Intelligence and ASX. The tour will focus on opportunities in technology and consumer goods. Participants include Australian and NZ listed and private companies, investors and family offices. For detail on participants and more, reach out to us through the Contact page.
Other Media Feature:
https://www.cnbc.com/video/2016/05/30/why-are-tech-companies-flocking-to-india.html
https://www.cnbc.com/video/2016/04/05/why-australian-firms-should-invest-in-india.html
