Brookfield adding $13 billion to its bet on India infrastructure

Brookfield Asset Management Ltd. plans to add to the $13 billion it has already invested in Indian infrastructure, describing it as the “brightest spot” in emerging markets.

“There’s no reason why we can’t keep up with that trajectory,” Arpit Agrawal, head of the Canadian investment firm’s India infrastructure business, said in an interview. Brookfield has ramped up spending in the sector across India from just $100 million eight years ago.

Brookfield’s wider themes for infrastructure that focus on digitalization, decarbonization and deglobalization play well in India, according to Agrawal. The firm will explore investments in fiber optics, where demand is projected to increase as more data shifts to the cloud, he said.

It may also partner with semiconductor manufacturers and increase investment in gas pipelines, Agrawal said. The firm has already invested in transmission towers, pipelines and data centers, and is looking at smart meters, he added.

Brookfield’s local team of 15 investment and operations professionals has faith in India’s growth prospects and demographics, while “predictable depreciation” in the rupee makes it easier to factor in returns, and currency hedges are easier to put into place, Agrawal said.

Toronto-based Brookfield has nearly $29 billion of assets across infrastructure, real estate, renewable and private equity investments in India. Towers account for between $10 billion and $11 billion of the infrastructure assets, followed by pipelines at $2 billion. The rest is in data centers that are being built.

The Indian government has made a push to upgrade poor infrastructure, and private capital has been crucial to that strategy. A World Bank report in 2022 estimated that the country needed to spend $840 billion over the following 15 years on urban infrastructure.

Regulatory and policy changes have eased infrastructure investment and are leading to a deeper pool of players in securities like infrastructure investment trusts. Brookfield’s InvITs command a third of the roughly 1.8 trillion rupees ($21.5 billion) market value of the asset class, Agrawal said. InvITs are designed to support funding for costly infrastructure projects.

Moving Forward

Brookfield didn’t need permission from the telecom department for its recent $2.2 billion acquisition of American Tower Corp.’s portfolio in India thanks to a regulatory change in 2021, Agrawal said.

“Incrementally, it’s becoming better,” he said. “We see India just going forward. There’s really no turning back.”

The firm is also dipping into its global investments to build out opportunities in India. Two years ago, Brookfield invested in Triton International Ltd., a freight container company that gives it access to data on the movement of goods around the world, Agrawal said.

Brookfield will also evaluate opportunities in airports, which are enjoying double-digit growth, depending on which ones the government decides to privatize and the kind of investors they’re targeting, Agrawal said. Roads will also be considered.

“Demand is never really an issue” in India, he said.

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