The co-CEO of a $28 billion firm says India is at an 'inflection point' - and lays out the 3 ways he's investing in the nation as its urban population doubles
- Rishi Kapoor, co-CEO of $28 billion Investcorp, sees a massive opportunity in India stemming from explosive population growth that will see 350 million people move to urban centers.
- He notes the need for increased technology, healthcare, and housing in order to meet swelling demand of young urban professionals.
- Kapoor says "all of the factors that you like to see are there."
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A big part of being a successful investor is seeing trends as they develop and positioning accordingly. That's what Rishi Kapoor, co-CEO of $28 billion Investcorp, is doing when it comes to India.
"Our entire investment thesis in India is underpinned by the trend towards urbanization," he said in an exclusive interview with Business Insider. "All of the factors that you like to see are there."
The factors that Kapoor is referencing relate to a large population of young professionals that's moving out of rural communities and entering the middle class. He says that over the course of the next 30 years, 350 million people will move to urban centers in India to join the 450 million that already live there.
"As they get more affluent, the discretionary spending component creates a naturally consumptive economy," he said. "It's naturally geared towards domestic consumption and services, and much less reliant on exports."
Kapoor notes that the GDP-per-capita in India is only about $2,000, in contrast to $62,500 in the US. But that's all about to change. He says that figure is "at an inflection point."
He sees these young, working class individuals clamoring for increased convenience as they adopt to their new, higher standard of living.
"We're looking at consumer tech businesses, which can provide access to these goods and services in a manner that's efficient, scalable, and priced at an affordable level - so it's not out of reach," he said. "These relatively young professionals are all looking to consume relatively good-quality goods and services at an affordable price point."
He continued: "They want access to things like leisure, entertainment, apparel, and electronics, but at an affordable price point and in an efficient form."
But that's not the only place Kapoor is seeing opportunity in India. He also sees swelling demand for healthcare coming down the pike.
"We're looking at healthcare, because as this population ages and gets more discretionary spending power, they're going to want access to quality healthcare that the rest of the world has come to expect and take for granted," he said. "It's not just general hospitals, but eye-care clinics, maternity and childcare clinics, and dialysis centers."
To round out his investment thesis, Kapoor conveys an opportunity brewing in real estate from the projected influx of 350 million into urban centers.
"As the young professionals get older, have a family, and want to own their own unit, there will be a big market for units that cost $50,000 to $100,000," he said. "That's going to mean we'll have to figure out new ways to provide affordable housing."
"That's a very interesting space from a real estate perspective," he concluded. "It's the basic needs, and we're just looking to cater to that mass market."