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October 14, 2004

FEER profiles Temasek's invesments in India

It is now the turn of the Far Eastern Economic Review to publish a profile of Temasek Capital's recent large investments in India. Some extracts:

Temasek's drive into India is part of an aggressive diversification plan, sparked by executive director Ho Ching, who is also the wife of Singapore's Prime Minister Lee Hsien Loong. The company plans to reduce its exposure to Singapore from around 75% today to 33% over the next six years. It plans to have another third of its money in developed markets such as Japan and the United States and a third in developing Asian markets such as Indonesia, Malaysia and India.

The stakes for the city-state are high. Singapore wants to create a cadre of global companies in order to diversify its economy, which is still reliant on electronics manufacturing and has seen some of that core business shift to China. Corporate Singapore can wring little more from its own economy, so its cash-rich companies and Temasek have to invest abroad to grow....

For a state-owned colossus Temasek has been surprisingly nimble in India, investors say. "They are fairly savvy investment professionals, but their biggest advantage is being able to move quickly," says Puneet Bhatia, managing director of Newbridge Capital, a private-equity fund that has invested in some of the same companies as Temasek....

Indian companies have welcomed Temasek as an investor because it has a history of sticking with its investments for more than five years, where other private-equity investors might look to cash out as early as three years into an investment. "We were very interested in finding a strategic investor who would not just give us money, but would also help us develop business," says Rahul Basu, chief financial officer of outsourcing company ICICI OneSource in Mumbai. Temasek reportedly invested around $30 million in the company in August.

Temasek can also provide instant access to Singapore's top companies. The top executives of ICICI OneSource, for example, took a tour of other Temasek-linked companies in September in the hope of generating more business.

Click Here to read the full article.