Billionaire GP Hinduja blames PE funds for India’s bad debt problem

UK-based billionaire GP Hinduja blamed private equity funds for some of India’s corporate debt problems citing the short term approach of such investors as reasons that often lead to companies collapsing and getting dragged to bankruptcy courts, but expressed great optimism about the country’s prospects.

“India’s democracy is strong and it is the best destination to invest in”, Hinduja told an audience comprising distinguished Indian and global business leaders at The Economic Times Global Business Summit on Saturday.

“I maybe a British passport holder but my heart is Indian and i believe in India”, Hinduja said expressing disappointment that he was forced to leave India at the age of seventeen to pursue the family’s business interests in Iran.


Outlining the group’s strategy, Hinduja claimed that the group was thriving due to its approach to form partnerships with people in various countries and because of their diversified businesses and geographical presence.

“I am proud to say that not a single company of ours has ever filed for bankruptcy”, he said.

Amongst other factors for the success of the group Hinduja rated the company’s strategy of making long term investments in businesses and retaining atleast a 51% stake in any venture as a mantra for his success.

Hinduja critiqued the business model of private equity funds, currently amongst the largest providers of foreign capital to Indian companies.

“They have a 4-5 year approach and then want to exit. Thats why we don’t have any private equity investors. But yes we would welcome sovereign funds to invest in our companies”, Hinduja said.

The Hindujas have consistently been ranked amongst the richest families in Britian for years now.

The group has diverse business interests cutting across financial services, technology, media and telecom among others.

Hinduja downplayed fears of uncertainty and possible global instability arising out of trade tensions between US and China and other macro economic and geopolitical factors.

“Opportunities lie in uncertainty”, Hinduja said advising investors and entrepreneurs not to waste time in trying to predict the outcome of factors beyond their control.

The Hinduja group which has diversified business interests recently entered the cyber security space.

“In India we see an opportunity to invest in technology and consumer sectors” Hinduja said highlighting that he was hopeful that Prime Minister Narendra Modi’s promise of a fast unfolding reform process combined with predictions that India could soon become a top three global economy would augur well for the country’s future.

Some of the larger investments of the Hinduja group include those in Ashok Leyland, IndusInd Bank and Gulf Oil Corporation.