Temasek Holdings’ exposure to India climbed to a record $16 billion in the last financial year despite a broader market correction as the Singapore state investor continued to augment its investments in technology firms and listed companies, according to senior executives.
The firm’s total portfolio in India has nearly doubled over the last five years, Vishesh Shrivastav, managing director, Investment (India) for Temasek said in an interview on Thursday.
Its India exposure grew to $14 billion in FY21 from $9 billion in FY20. The figure stood at $11 billion in FY19, $10 billion in FY18 and $9 billion in FY17.
Earlier this week, Temasek reported its net portfolio value hit a record high of S$403 billion ($297 billion) globally in FY22, a S$22 billion rise from the previous year. The growth came despite a global rout in tech stocks over the last six months.
Last year, four of Temasek’s portfolio firms in India—Zomato, Policybazaar, CarTrade and Devyani International—went public. Each has since seen a sharp correction in stock prices.
On Thursday, Zomato was trading at ₹55.6 per share, while CarTrade was at ₹643 apiece—both more than 56% below their all-time highs. Policybazaar was trading nearly 58% below its all-time high of ₹548.8 per share.
Shrivastav said, however, that Temasek’s total India portfolio grew “really well” in FY22 and had “beaten the index”. He didn’t elaborate.
The firm’s exposure to India is a mix of direct investments in private and public companies as well as investments made through the Indian arms of its other global companies such as DBS and Sembcorp.
“Generally speaking, the India portfolio has done quite well for us,” Shrivastav said, adding that the firm is “long-term positive in India”.
Temasek’s positive stance on India comes at a time when it has turned cautious globally with fears of a recession in the US. India is, however, expected to be more resilient as the economy is more focused on domestic consumption, though there may be a few spillovers in external facing sectors, said Mohit Bhandari, managing director, Investments (India) at Temasek.
Typically, Temasek invests about $1 billion every year in India, though its investment last year was ‘much higher’, Bhandari said.
The firm is also seeing more opportunities to consolidate some of its portfolio companies.
In the past quarter, there have been three or four instances wherein Temasek has backed its portfolio companies in making acquisitions. It joined the investor consortium financing Lenskart as the eyewear unicorn acquired Japan’s Owndays in a $400 million deal. Temasek also financed Shiprocket in its purchase of Pickrr in a $200 million deal and also joined in on Upgrad’s ongoing equity round which valued the business at $2.2 billion, Shrivastav said.
Companies are also eager to become unit economics positive and to that extent “consolidation helps” Bhandari said.
The executives noted that valuations of loss-making tech firms have particularly seen corrections though they have fallen across the spectrum.
“Companies that have raised capital would rather let the business grow into the valuation that they’re seeking, and in the process, maybe recalibrate their priorities; to recalibrate the tradeoffs between growth and profitability, (they may) try to control unit economics before they go back to market. But in general, yes, valuations are becoming more realistic across the board,” Bhandari said.
