Indian conglomerates' new pitch to foreign investors: Build with us from day one
Instead of waiting to sell stakes after projects are de-risked, India's largest business groups are increasingly bringing in foreign equity partners at the outset to share risk, reduce capital outlay and fund simultaneou
Summary
Instead of waiting to sell stakes after projects are de-risked, India's largest business groups are increasingly bringing in foreign equity partners at the outset to share risk, reduce capital outlay and fund simultaneous expansion across sectors.
India's biggest conglomerates are changing how they finance mega projects, with a series of recent deals showing they are increasingly bringing in foreign equity partners before assets are built and de-risked, instead of relying largely on debt and internal cash.
The approach helps companies pursue multiple capital-intensive expansions, while limiting the strain on their balance sheets, experts said.
The strategy is showing up across sectors, including renewable energy, metals, data centres and infrastructure, as conglomerates race to expand in businesses that require billions of dollars in upfront investment.
For instance, the Adani Group on 2 July signed up a partnership with the United Arab Emirates' IHC Group to jointly invest in a planned $11.5 billion entry into aluminium production. Similarly, JSW Steel brought in South Korea's POSCO Holdings as a partner for its planned greenfield steel plant in Odisha before finalizing the land for the project. The two companies announced the tie-up in August last year.
In November 2025, Tata Consultancy Services (TCS) secured a $1 billion commitment from American fund manager TPG for its planned entry into data centres. Reducing capital outlay was one of TCS's explicitly stated objectives for the deal. “Bringing in TPG as a strategic investment partner will help TCS drive stronger returns to its shareholders, reduce its capital outlay, and create long-term value for the data centre platform,” the company had said in a press release.
The model itself is hardly new.
Adani had partnered Singapore's Wilmar in 1999 to enter the edible oils business, while the Tata Group teamed up with Japan's NTT Docomo to enter GSM telecommunications.
What appears to be changing is the pace at which conglomerates are turning to such partnerships as the groups expand across multiple capital-intensive industries at once, rather than scaling one business before moving to the next, the experts said.
“Indian conglomerates are increasingly bringing in equity partners at an earlier stage of large capital projects. This reflects India’s growing importance as a destination for global industrial and infrastructure capital as well as the greater maturity of Indian sponsors in managing global partnerships to optimize risk, capital allocation and execution,” said Viswanathan Rajendran, senior partner at Kearney, a management consulting firm.
The traditional model of building with debt, scaling an asset and monetizing a minority stake later remains the dominant financing strategy, Rajendran said, particularly when projects are proven and execution risk is relatively low.
“However, for mega-capex sectors such as ports, metals, energy transition, data centres and advanced manufacturing, early-stage partnerships can be more value accretive. They allow sponsors to share development risk, strengthen the balance sheet, bring in technology or operating expertise, secure customer or offtake linkages, and improve bankability,” he said.
The Adani Group, JSW Steel and TCS did not respond to Mint's request for comment.
The logic extends beyond greenfield projects. Companies are also bringing in partners after assets are operational but before the next phase of expansion, using outside capital to fund future growth while reducing their own investment burden.
Earlier this month, Adani Ports and Special Economic Zone (APSEZ) sold a 49% stake in its newly-built Vizhinjam trans-shipment port in Kerala to a unit of global shipping major MSC for $539 million. The deal freed up immediate cash for APSEZ, while halving its share of the investment required for the port's planned $1.75 billion expansion.
Last December, JSW Steel sold half the stake in its unit Bhushan Power and Steel Ltd to Japan's JFE Steel Corp. for ₹15,750 crore to free up cash and reduce capital expenditure for a planned capacity expansion.
The JFE and POSCO joint ventures will account for two-fifths of JSW Steel's planned expansion to 42 million tonnes per annum by 2032.
The trade-off is that companies give up part of the future upside by selling equity earlier, rather than monetizing a fully de-risked asset at a premium.
“But the trade-off can be attractive if the partner helps accelerate execution, reduce capital intensity, improve financing terms, or increase the probability of the project reaching scale,” Rajendran said. “In that sense, early equity partnerships are less a sign of funding weakness and more a sign that Indian conglomerates are becoming more disciplined, globally networked and sophisticated in how they build large platforms.”
According to Karthik Balakrishnan, professor of Accounting at ISB, the appeal extends beyond capital. Partners often contribute technology, customer relationships or specialized operating expertise that debt financing alone cannot provide.
For instance, bringing on the MSC Group, one of the world's largest shipping lines, as an equity partner in the Vizhinjam port improves the prospects of it becoming a globally competitive trans-shipment hub.
“Such a case changes the economics of building at scale,” Balakrishnan said.
He, however, cautioned against drawing broad conclusions from a limited number of transactions.
“Whether this particular decision represents a genuine shift in financing philosophy or simply reflects the sheer size of the projects now being undertaken—where no single balance sheet can efficiently absorb the full capital requirement—is something the data on deal frequency over time would need to settle and cannot be concluded by observing a handful of transactions,” he said.
About the Author
Nehal Chaliawala
Nehal chronicles India’s top conglomerates for Mint. From navigating the complexities of big-bang mergers and large-scale fundraises to decoding high-profile recruitments and seemingly inexplicable corporate pivots, Nehal focuses on unpacking the long-term strategies of the country’s most influential business houses. He aims to provide readers with a clear-eyed view of how these corporate titans shape the broader Indian economy.
His professional journey began at The Economic Times in 2018, where he spent over five years before joining Mint in 2023. Over his career, he has tracked diverse sectors like automobiles, metals, cement, power, infrastructure, and renewable energy. He also keeps a close watch on the intricacies of corporate finance and corporate governance. This wide-ranging sectoral experience allows him to better understand India’s large conglomerates that sit at the confluence of these vital industries.
Nehal studied mechanical engineering from the Pune University and graduated with distinction in 2017. Driven by a passion for storytelling, he pivoted to journalism immediately after, attending the Asian College of Journalism in Chennai. While his time in the newsroom has made him a healthy sceptic, his engineering roots keep him perpetually inquisitive about how things work—and why they fail.
He actively encourages readers to reach out for feedback, collaboration, or news tips. Nehal can be reached via LinkedIn or directly at nehal.chaliawala@livemint.com.
Source: Livemint — Companies
