MK Sinha, managing partner and CEO of IDFC Alternatives, feels that India being an infrastructure starved country provides a much greater opportunity than China if it can address some structural issues. While China follows a model where infrastructure is overbuilt, in India infrastructure is built to address the growth that has already happened—financially a much more robust model, he argues.
“They are overbuilding their infrastructure—maybe that is the right model to follow provided you have more capital than you need. You can overbuild and growth then follows. In India, our strategy has been to build infrastructure to cater to the growth that has already happened and I think it is a more robust model financially because you see the growth, you see the infrastructure and then put capital to work.” he reasons.
“Unfortunately, we have a multi-party government with conflicting agendas and that slows down execution of infrastructure. These are two very different markets but in the absolute sense, if we fix some of our issues, India is a more robust market than China,” asserts Sinha, whose firm has raised the largest capital mobilised by an India-focused alternative fund over the last two-three years.
IDFC Alternatives raised $644 million for the first close of its second infrastructure fund last month. The fund, which is on target to raise $1 billion, comes at a time when Indian infrastructure has troughed and fundraising has become challenging.
In an interview with VCCircle, Sinha speaks about IDFC Alternatives’ fundraise and strategy, how international investors are looking at India and the challenges of investing in the country.