27 March 2024 – Rahul Bhasin, Managing Partner at Baring Private Equity Partners, expresses confidence in the continued global dominance of Indian information technology (IT) services, despite the disruptive impact of artificial intelligence (AI). However, he acknowledges that the industry is poised for a period of transition and uncertainty as it adapts to evolving market dynamics.
Bhasin highlights the impending challenges faced by Indian IT services as a significant portion of their traditional workload is automated by AI technologies. This shift, he contends, will necessitate fundamental changes in business models, particularly for larger IT service providers. Despite the disruption, Bhasin emphasizes that the technology sector will remain the fastest-growing industry globally, albeit undergoing internal transformations.
While maintaining a preference for the tech theme, Bhasin indicates that Baring will select investment opportunities based on emerging market trends. He also discusses the outlook for consumer and industrial sectors, noting the promising growth prospects of consumer businesses tempered by their current high valuations. In contrast, Bhasin anticipates a potential upturn in the industrial sector, citing renewed activity in various segments such as real estate, hospitality, and infrastructure, supported by government initiatives.
Regarding exit strategies for private equity (PE) firms, Bhasin underscores the dynamic nature of divestment methods, which vary based on market conditions. He mentions options such as block deals, IPOs, strategic sales, and buybacks, emphasizing the time-bound nature of PE investments and the need for flexibility in exit approaches.
