Tuesday, April 29, 2008

Indian infrastructure. Big numbers, high hopes!

Realty sector is getting hot; yet again

While the housing sector experiences a slump with investors vanishing from the market and end users finding rising interest rates a major hurdle to buy their dream homes, the broader realty infrastructure sector remains hot. Leading PE funds such as Blackstone, 3i, ICICI Venture, Axis have all raised major rounds focused on Indian infrastructure sector.

Why this rush towards Indian real estate and infrastructure?

According to estimates from ICICI Securities, the Indian real estate market is worth $57 billion, and is expected to grow at a compounded annual rate of 13% to touch $105 billion by 2012. This would require investments worth $85 billion across the residential, commercial, retail and hospitality sectors. On infrastructure, the Indian government has forecast the need to spend $492 billion over the 11th five-year plan ending 2012.

As such, the investment climate for this sector has been hot, and funds, both domestic and global, have been queuing up for a slice of the action. Did you say liquidity crisis...?

No wonder I am finding myself in a funny kinda’ situation.

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