MUMBAI – JP Morgan India Pvt. Ltd., the subcontinent-based subsidiary of American financial-services heavyweight JP Morgan Chase & Co., is following through on a plan to invest $1 billion of its own money in multiple industrial sectors in India.
Kalpana Morparia, JP Morgan India’s chief executive officer, recently revealed that the company has invested nearly $500 million from the fund in four sectors of the Indian economy – real estate, infrastructure, manufacturing and financial – and that it is exploring other investment opportunities in the South Asian nation.
“We have a fund of $1 billion dollars to invest in Indian companies,” Morparia said. “We have committed nearly half the money in real estate, infrastructure, manufacturing and financial sectors.”
Morparia did not identify the companies or projects that JP Morgan India has invested in, but she described funding commitments as “opportunistic,” and said that the company was in no hurry to complete the $1 billion plan because it is investing its own money.
New York City-based JP Morgan Chase & Co. is ramping up its operations in India at a time when other large, international banks and financial-services firms are pulling back – and despite mounting fears that the worsening global financial crisis will significantly reduce the country's economic growth. In mid-November, JP Morgan India reduced its forecast for India’s economic growth for 2008-2010, but added that recent high-profile moves by the Reserve Bank of India, including aggressive interest-rate cuts, would support economic growth in the country.
"The moderation in exports, small business output, and real estate related activity could crimp urban consumer spending as employment and household income growth slackens," JPMorgan said in the Nov. 17 research note.
In September 2008, JP Morgan India said it would double its private-equity investments in the country up to $1 billion, in addition to investing approximately $500 million in its corporate finance and advisory units. Total private-equity investments across India increased 3.2 percent in the first half of 2008, to about $6.8 billion
JP Morgan Chase has invested in a variety of private Indian entities since last year, including L&T Infrastructure Development Projects Ltd., Apollo Hospitals & Enterprises Ltd. and Cafe Coffee Day, a Chikkamagaluru, India-based division of Amalgamated Bean Coffee Trading Co. Ltd. Café Coffee Day has more than 650 cafes in 110 cities across India, making it the country’s largest coffee café.
JPMorgan India has also acquired separate, $50 million equity stakes in a pair of fast-growing, New Delhi-based real estate developers: Emaar MGF Land Ltd., which focuses mainly on residential, commercial, retail and hospitality projects, and BPTP Ltd., which is currently developing numerous projects, including residential and commercial complexes, retail spaces, IT parks and special economic zones and hospitality ventures.
JP Morgan India’s continued funding for Indian real-estate ventures stands out in a country where developers are struggling to complete ambitious projects. As the global economic crisis has worsened in recent months, local banks have clamped down on lending to the construction industry and a stock market slump has closed off equity raising through initial public offerings
JPMorgan Chase, which launched its India operations in 2001, has approached India’s central bank for licenses to set up four more branches in the country. The branches would be in Delhi, Chennai, Bangalore and one more destination in the south, according to the company.
In addition to its Mumbai banking branch, JP Morgan India currently has back-office operations in Mumbai and Bangalore. It employs more than 11,500 people in the country and plans to increase its headcount there, in spite of the slowing Indian economy.