Signage for Temasek Holdings Pte during a news conference in Singapore, on Tuesday, July 9, 2024. Singapore state-owned investor Temasek’s big bet on China has soured further, as the US and India played a bigger role in generating returns.
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Singapore state investor Temasek Holdings is on a hot streak in India, where three of its portfolio companies have gained more than 30% after market debuts this week.
On Wednesday, shares of logistics company Shiprocket listed at a 35% premium and ended the day at 143 rupees ($1.50), nearly 50% above the initial public offering price. The IPO was oversubscribed nearly 100 times, owing to strong demand from both institutional and retail investors.
Dairy product maker Milky Mist, which listed on Tuesday, traded 40% above the IPO price on Wednesday. Temasek holds over a 5% stake in both these companies.
That’s as Molbio Diagnostics, which debuted on Monday, traded at a premium of 26% to its IPO price, after a drop on Wednesday. Temasek owns an 8.74% stake in the company, according to data on the BSE. Temasek-owned Indian hospital chain Manipal Health, which listed in India earlier this month, is at a 25% premium to its IPO price.
“India is our best-performing market on a 10-year basis,” a Temasek spokesperson told CNBC, adding that the sovereign wealth fund has deployed nearly $9 billion in India in the last three years. “We were a net buyer of listed Indian equities during the past financial year, using periods of market volatility to add selectively to high-conviction positions.”
Temasek’s optimism around the Indian market stands in sharp contrast to other foreign investors, who sold nearly $19 billion of Indian equities last year and have been net sellers for most of this year, leading to outflows worth $24.7 billion through Aug. 19, according to data from NSDL.
In a survey of fund managers published by BofA Global Research on Tuesday, India emerged as the least favored market in Asia. Lack of artificial intelligence plays, weak growth, slow pace of reforms, and high valuation were some of the key concerns cited by the money managers as to why they were underweight India.
That survey “is a clear awakening signal to India policymakers that global investment in India is at the lowest level,” Nitin Jain, chief executive and director of Kotak Mahindra Asset Management Singapore, told CNBC.
He highlighted, though, that foreign investment flows into India were better now than three months ago, hinting at improvement in foreign investment flows across debt and equity markets in the last two months.
Meanwhile, Temasek said it remains “constructive on India’s structural growth, underpinned by its large domestic consumer market, growing middle class, formalization, infrastructure build-out, and deepening capital markets.”
It is playing on these themes by investing in companies across consumer, financial services, and healthcare, but is also seeing “increasing potential” in companies across industrials, infrastructure, and renewables, the spokesperson said.
The Singaporean fund has a total India exposure of $42 billion, representing a “four-fold growth over the decade,” the company said.
