India’s take-private norms a ‘mathematical impossibility’, need reforms, says Blackstone's Gray
MUMBAI : Government reforms aiding the privatization of listed companies could help unlock greater value for investors in the Indian market, said Jonathan Gray, president and chief operating officer at Blackstone, one of the largest alternatives investors globally. "The government has done a lot of incredibly positive things. I think one thing that could help unlock the market here is an ability to take companies private, to help improve them, then bring them back to the market, maybe with more scale," Gray said during a media briefing in Mumbai on Wednesday.
Currently, more than 90% of the shareholders of a listed company need to vote in favour of a take-private, or privatization, motion, which Gray called a "mathematical impossibility" because of the difficulty in securing these votes. In the US, investors can take listed companies private with 51% of shareholder approval. In November 2022, Blackstone acquired 52% of IT services business R Systems and attempted to take the company private through a subsequent delisting offer, which failed.
Shares of R Systems ended Wednesday’s trading down nearly 1% at ₹470 apiece on BSE, but the price is up from ₹245 per share when Blackstone invested in the company in 2022. Reducing the timeline to close deals would make the Indian market more attractive, Gray said. "Getting M&A done here often takes much longer than it does in other parts of the world, the process can take 18-24 months, as they move to streamline," Gray said.
Nevertheless, India is Blackstone’s third-most important market after the US and the UK, and the firm is pursuing opportunities in sectors that touch the rising middle class of India, he said. “India stacks up really well for us. On the equity side, No.
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