$50m India-focused fund to be launched by UAE financial major

Gulf Islamic Investments (GII), the UAE-based Shari’ah-compliant financial services major, is set to announce the launch of its second India-focused fund, with a size of about $50 million.

The proposed fund – India Growth Portfolio II (IGP-II) – is slated to be launched soon and will be deployed for investments in companies across sectors in the South Asian country.

Significantly, GII will be the first to announce a new India-centric fund after the Indian authorities decided last week to classify foreign portfolio investors (FPIs) from the UAE as eligible for a Category-I licence.

FPIs coming from the UAE were previously classified as Category-II, which were subjected to stringent compliance norms.

“We are in advanced stages of creating our second India-focused fund, which will be launched by Q2, and will encompass multi-sector investment opportunities,” Pankaj Gupta, co-CEO of GII, told Arabian Business in an exclusive interview.

“According to initial indications based on investor appetite, this latest investment will be at least twice as large as our debut offering, amounting to well over $50m,” Gupta revealed.

Market experts see the move by the financial services firm, which has over $2 billion assets under management worldwide, as testimony to the increased traction with the Indian market by Gulf-based investors.

Gupta also disclosed that GII is currently evaluating a number of investment deals in India, primarily in the healthcare, consumer and technology sectors.

“Besides IGP II, in terms of its venture capital activities, we are selectively considering investing in some of the late state start-ups in India this year,” he said.

“As one of the world’s most populous and fastest growing economies, India represents an incredibly attractive investment destination for GII. Given the tremendous growth opportunities in the country, India will continue to play a prominent role in GII’s future investment plans,” the executive added.

GII closed its debut India-focused fund in the early part of last year, with significant minority stake investments in a portfolio of healthcare companies, including leading hospitals.

Although Gupta said that GII’s investment approach in India is sector-agnostic, healthcare has been identified as an attractive, non-cyclical and growing sector propelled by several trends such as lifestyle diseases and lately the Covid-19 pandemic.

Gupta said GII was also open to invest in large companies in India, like the recent big ticket investments made by ADIA, Mubadala and Saudi Public Investment Fund in some of the Reliance Group entities.

Gupta said GII was also keen to partner with Indian start-ups and companies in their expansion plans to the Middle East.

“Expanding into the Middle East is a natural first step for Indian companies with ambitions for global growth and this trend will continue in the near future,” he said.

“Many Indian firms prefer establishing their first international outpost in the Middle East, especially the UAE, for a variety of reasons including its proximity to the sub-continent, options for unrestricted foreign-ownership, and its cosmopolitan population and international infrastructure serving as the ideal ‘lab’ environment in which to test global appeal for a product or service,” he added.

Gupta revealed that GII would also look at options to team up with Indian or global investors to make investments in India.

“We believe that local knowledge and market know-how is a critical skill that needs to be leveraged in order to unlock more high-growth investment opportunities,” he said.