The Lord Of Indian Real Estate

At the core of a nation’s economic strength are its small and emerging companies. For decades, Europe’s strongest economy Germany has shown to the world how healthy small and medium enterprises can be powerhouses of economic well-being. It’s been idolised not just in Europe, but also in India and across the globe. Over years, India’s own emerging companies landscape has gained from strength to strength. Now, lower corporate tax rate and the performance linked incentive schemes have brought a whole new vibrancy into this eco-system.

In this Special Issue, Fortune India’s Next 500 companies have got back into the black after struggling with profitability for three successive years. The Next 500 companies have been gasping for profitability, their cumulative profit growth falling 65% in FY18 and 35.75% in FY19, before turning red last year. Far from a cumulative loss of ₹46,607 crore in FY20, the universe reported a profit of ₹14,902 crore last fiscal. V. Keshavdev examines the transition.

Investors have noticed the change. Overall, open-ended equity mutual funds hold ₹86,349 crore, 6.5% of their assets under management (AUM) in Next 500 stocks. Small cap schemes have invested ₹26,648 crore comprising 25% of their portfolio. Read Avneet Kaur’s account of the mutual fund industry’s favourite stocks from among this universe.

Meanwhile, real life struggle continues. Emerging companies, particularly those headquartered in Tier II and III cities, battle with a perpetual crisis of attracting and retaining talent. Ajita Shashidhar explains how the likes of Bikaner’s Bikaji, Indore’s Prataap Snacks, amongst others, deal with this HR challenge.

Our cover story this issue though is on global PE giant Blackstone’s adventures in India’s real estate and PE markets. Starting in 2005, Blackstone India has made some of the most aggressive bets on India’s real estate sector, building an enviable portfolio of 125.5 million square feet. That makes the US-headquartered alternate investment giant ‘India’s Biggest Landlord’. In the past 5 years, particularly, Blackstone has been insatiable, picking up any major office or retail space put up for sale. In this time, it acquired some of the country’s trophy assets such as the Indiabulls portfolio in central Mumbai; Cessna, a 4.2 million square feet office asset in ORR Bangalore; One BKC, a 0.7 mn square feet landmark office asset in Mumbai’s commercial hub the Bandra-Kurla Complex; Seawoods Grand Central, a 1 million square foot mall in Navi Mumbai; even a 414-key JW Marriott hotel in Pune.

Blackstone’s India interests are not just limited to realty. It has also built a massive PE portfolio comprising majority control in firms such as Mphasis, Sona Comstar, Piramal Glass, Essel Propack (now called EPL), Aakash Education, Aadhar Housing Finance. Read what differentiates Blackstone’s realty and PE strategy in India.

But don’t miss Asmita Dey’s story on how Quick Commerce has emerged as e-tail’s greatest disruptor with a new set of companies taking on the might of Amazon and Flipkart-Walmart to deliver to customers within 10-30 minutes. New players such as Zepto along with older players such as Swiggy, Blinkit and Dunzo are sprucing up their breadth and reach with micro warehouses to enable fast deliveries. Will it work?