NRIs investing millions in SMEs

An increasing number of non-resident Indians are investing in well-established small and medium enterprises in India, especially those involved in businesses like telecommunication services and properties, according to a Singapore-based wealth management advisor.

"We have seen cash-rich Indian SME-owners investing in global assets, especially mineral resources such as coal and gold mines," said Mandeep Nalwa, chief executive officer of Taurus Wealth Advisors Pte Ltd and Taurus Capital Management Pte Ltd.

"These Indian investments are significant in size, some as much as $100 million per commitment, though they are often overshadowed by the multi-billion dollar international deals being done by Indian multi-national corporations," said Nalwa in an interview with PTI Tuesday.

He said his group has helped carry out due diligence on a large number of properties and assets in India and globally to support the investment plans of their clients, a large number of whom are Indians residing in India and abroad.

"These clients want holistic advice on their investments, which covers both traditional financial asset investing and non-traditional assets. Clients want to diversify their risk between the volatile financial markets, which are hostage to well-known geo-political and economic noise, and the relatively long-term investment calls on the economic development of emerging countries, especially India and China," said Nalwa.

"While Taurus focuses on providing investment advice to high net-worth individuals on their financial assets, discussions with clients often reveal their keenness to participate in unlisted investments," he said.

Nalwa stressed on the importance of due diligence for investors committing their resources to non-listed assets.

"Overseas Indians have expressed strong interest in the growing businesses in India, citing the higher rate of returns on their investment and the country's double-digit economic growth," he said.

"The investment flow into India is picking up momentum, with more high net-worth individuals of India-origin taking up stakes in SMEs, which may offer a double-digit rate of return on investments," Nalwa added.

"Global investors can no longer ignore the investment opportunities in India and taking this cue, we see an increasing number of NRIs in that race for participating in Indian prosperity, as the main Western, American and Asian markets have matured," he said.

While the Taurus Group administers about $ 450 million worth of capital under its wealth management programmes, it also concentrates on small investors, whose combined investment pool is significant.

"When combined, these smaller investments are large and significant. We see these investments growing at a double-digit rate annually, given the large base of NRIs in the high net-worth individuals segment," said Nalwa.