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Can India remake Macquarie?

Will Macquarie’s launch into the Indian infrastructure market help firm up its ailing balance sheet?

The Aussie i-bank is partnering with State Bank of India and the World Bank’s International Finance Corporation to raise capital for investment in Indian ports, roads and power plants.

Is this a wise investment in a growing market, or a desperate gamble to get the bank back on track?

Macquarie thinks the timing is just right because the Indian government is now seeking to encourage private investment.

Can Mac win in India, or will it suffer the same fate as Ponting’s players? Let us know below.

Comments (8)

  1. There is a mind-bending amount of infrastructure in the pipelines in India. Macquarie needs to be in this market if it is to stay a serious player.

  2. The Indian government is finally recognising that it needs private investment and if that trend continues there will be more and more opportunities for gobal banks. The “Licensing Raj” is finally dying.

  3. Macquarie Infrastructure Group and Macquarie Airports both have tanking share prices – not sure if this will help them much. Will see. They had to do something I suppose.

  4. SBI is the largest Indian Bank and by far has the most impressive performance and grow strategies compared to other banks in the country.
    Macquarie has taken an effective step to partner with SBI, however, political realms in India are not as black and white as in other countries such as Australia. Not sure what the current stature of Indian govt is on FDI, but largely- If the regulatory approvals are put in place, Macquarie will potentially rake up the lost dollars with ease.

  5. i guess a good move as the infrastructure devlopment in india is in infancy . sbi is a reputed bank in having a largest customer base ( u look at a country with a population of 1.3 bill) the govt is keen on opening up the infrastructure sector. mac bank have been aggresively opening up in indian sector. the benifits would be felt by 2020

  6. And keep in mind that India is the world’s largest democracy with English being one of several official languages… the potential is huge

  7. Given the current economic environement in the developed world I think this is a strategic move as emerging economies like India are the ones than are currently driving global growth. Emerging Markets represent 11% of global stock-market capitalization, compared to 55% of GDP and 87% of world population.

  8. A large number of other global players (IBs, private equity etc) have already set up investment businesses with a focus on India, so the market is already quite competitive and Macquarie seems to be a late mover in this regard. SBI would be a well-connected partner, although the SBI approach is likely to be very different from Macquarie’s, which could cause problems for the joint management structure. Also, the capital needs to be competitively priced, and from what I understand, the target return is quite a lot higher than the return levels at which transactions have been undertaken in the Indian market over the last few years. Therefore, it is a strategy Macquarie has to pursue (and they have to pursue a China strategy as well), but I am not sure whether the “competitive advantage” that Macquarie likes is present, so success will be harder to achieve.

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