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Both the Modi and Abbott governments have been strong in their desire to have a ‘small government’ and to disinvest from non-core activities. The Australian government recently disinvested its holdings in Medibank Private, a float which raised over $5.7 billion. With other targets such as Australia Post in mind, the conservative government’s mantra of disinvestment is also echoed in India in current times.
To test the market for Australian appetite in public sector undertakings (PSU), Aradhana Johri, Secretary, Department for Disinvestment, Indian Ministry of Finance was in Australia recently. Accompanied by a small team of officials from the Ministry and senior representatives of BHEL, NTPC, NMDC etc. the roadshow took in meetings with major superannuation funds and fund managers in Sydney, Melbourne and Brisbane over a week.
“This is our first visit of this nature to Australia,”Aradhana Johri told Indian Link. “Normally, we meet with investors in Singapore, Hong Kong etc. but there is now a plan to reach out to the superannuation fund industry in Australia to look at long term positions in Indian PSUs,” she added.
With accumulated value of Australian superannuation heading towards $2 trillion it but seems a natural fit for the team in charge of disinvestment from India to find their way to Australia to promote the value of investing in Indian assets.
Speaking to Indian Link, Ms Johri stressed the economic stability of India and how fund managers are looking for stable markets. “Over the past few days, Greece and its woes have in the news and the Eurozone is working hard to resolve the various associated issues. Investors who are looking for investments in emerging markets have normally looked at China and India. Recently there has been some nervousness about the Chinese share market and in comparison, India gives investors a great option to invest long term in an economy which is showing great potential.”
Linking this with superannuation fund objectives of Australian managers who want long term steady returns, Ms Johri said the three sectors which will be attractive to them will be power, infrastructure and finance. “All these have strong alignment with what the fund managers want,” she added.
To introduce Secretary Johri and her team to local Australian professionals, Indian Consul General Sunjay Sudhir organised a business dinner in Sydney. This gave an opportunity for the local community to know more about the disinvestment opportunities from India through Secretary Johri and also listen to other senior officials from the various PSU representatives. “The presentation was informative but it lacked a strong link which excites the local investment community in Australia,” a well versed local finance specialist later told Indian Link. “Sustainability, and how these PSUs in line for disinvestment are working on minimising any negative impact on environment was totally ignored in all the presentations and these are important issues which are considered by large fund managers. The Chinese have their story correct on this, the Indian government needs to ensure they also have thought this through if they expect to pick up monies from Australia.”