Japanese investment in Indian equity mart=$1bn

Japanese corporates and retail investors see India as a major investment destination and already up to $1 billion has reached Indian equity markets.

"The Japanese retail investment has touched $1 billion and they are mostly through mutual funds," Mizuho's deputy president, Yukata Endo, told reporters in Mumbai on Tuesday.

Mizuho Financial Group has an alliance with the Rs 8,500 crore (Rs 85 billion) Tata Capital, the financial services arm of the Tata group.

Tata Capital's managing director, Praveen P Kadle, said it was likely to come out with a private equity fund shortly.

He, however, declined to say what could be the size of the private equity fund. Indications are that initially the aim is to have a fund-size of $350-400 million.

Japan offered tremendous opportunities for Indian companies to raise capital through equity as well as debt, Kadle said, adding the alliance with Mizuho provided the requisite platform for Indian corporates to tap the Japanese market.

Endo said that the time is ripe for Japanese investors to invest in India, cashing in on the opportunities the market offers.

Japanese were looking at India for big investments now as they feel the country along with China are poised for sustained high-growth.

Besides, the outstanding performance of Japanese companies in India like Suzuki and Honda provided the right platform for investments into India, he said.

Tata Capital has been growing rapidly and in the first four months of this current fiscal, it has recorded a growth of 12 per cent which indicated it could touch the Rs 10,000-crore (Rs 100-billion) mark by end-this fiscal, he said.

Tata Capital which completes two years of its existence in September was poised to leap-frog in its businesses which are mainly in retail, corporate, construction and infra financing and securities business.

Corporate financing accounted for nearly Rs 5,000 crore (Rs 50 billion), including part-funding of Tata Motors' acquisition of Jaguar and Land Rover.

Kadle said that consumer finance accounted for Rs 2,000 crore (Rs 20 billion) and it plans to expand its auto financing and real estate loans in a big way.

Home loans now accounted for Rs 400-500 crore (Rs 4-5 billion), he said, adding in mortgage financing, the company was looking at Tier II and III cities.

The company is now in the process of tying-up with some of the top auto companies for passenger car financing.

Asked if Mizuho was looking at an equity stake in Tata Capital, Endo said that 'we have not discussed this.'

Image: The Japanese flag