Belgium-based investment firm Verlinvest is set to significantly increase its annual investments in India over the next three years, driven by the country’s growing middle class and its position as the world’s fastest-growing major economy. According to Arjun Anand, Managing Director and Head of Asia at Verlinvest, the firm sees immense potential in India’s healthcare and lifestyle sectors, positioning the country as a top priority in Asia for the company.
“India is the winning market for Verlinvest in Asia, so we are allocating more resources and team focus to India as returns on investments are improving,” Anand said in an interview with Reuters earlier this week. The company, which has been consistently investing more than 100 million euros (approximately $110.3 million) annually in India over the last few years, now plans to double this figure within the next two to three years.
Betting Big on India’s consumer market
Verlinvest, which manages over 2 billion euros in assets globally, has steadily increased its focus on India, seeing it as a market with vast untapped potential. As India outpaces other major global economies, especially in terms of consumer spending, the firm is keen to boost its investments in Indian companies that cater to the healthcare, wellness, and lifestyle sectors. These areas are seen as high-growth due to India’s expanding aspirational middle class.
Although Verlinvest has invested heavily in India over the past decade and a half, Anand did not disclose the exact returns the firm has achieved so far. However, he emphasized that Verlinvest’s outlook for India remains bullish, especially with India showing resilience and outperforming many other global markets.
Expanding investments in Indian brands
Verlinvest has already made significant investments in the Indian market, including notable stakes in yogurt brand Epigamia and popular coffee chain Blue Tokai. Both companies are examples of how Verlinvest is tapping into India’s evolving consumer preferences, particularly the growing demand for premium, health-conscious, and lifestyle-oriented products.
With investments in major global brands like vegan milk producer Oatly, coconut water brand Vita Coco, and pet products retailer Chewy, Verlinvest has considerable expertise in scaling consumer-focused businesses. This experience is expected to help the firm navigate India’s dynamic market, enabling it to identify promising opportunities and scale its existing portfolio.
Anand noted that healthcare and lifestyle companies in India currently make up less than 10% of Verlinvest’s portfolio in the country—substantially lower than the global average of 25% in healthcare and 20% in lifestyle businesses. Given this disparity, Verlinvest is looking to increase its exposure to these sectors, which are expected to see rapid growth in India due to the country’s changing demographics and rising income levels.
Challenges in India’s investment landscape
Despite the optimism, Anand acknowledged that investing in India presents unique challenges. One of the major hurdles is the longer timeframe required to generate returns. In India, it typically takes about a decade to exit investments, compared to five to seven years in other markets, such as Europe and the U.S.
Additionally, the depreciating value of the Indian rupee can erode profits, making it more difficult to achieve the same level of returns as in other regions. “It takes longer to book returns on investments in India, and the depreciating rupee also hurts returns,” Anand noted. However, despite these challenges, the firm is confident that India’s long-term growth prospects outweigh the risks.
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Verlinvest believes that India offers substantial opportunities for growth and return on investment, particularly as the country’s economy continues to expand and consumer spending increases. The firm’s commitment to doubling its investment allocation in India reflects its confidence in the market’s potential.
Future focus on consumer firms
More than half of Verlinvest’s capital globally is tied to consumer-focused firms, and this trend is expected to continue in India. The country’s burgeoning consumer market, driven by rapid urbanization and a growing young population, presents a fertile ground for investments in healthcare, wellness, and lifestyle sectors.
As Verlinvest ramps up its efforts in India, it is poised to not only expand its existing portfolio but also capitalize on emerging trends in the Indian consumer space. With a strategic focus on healthcare and lifestyle businesses, the firm is betting that India will remain a key driver of its growth in the coming years.
“India offers a much greater growth opportunity, and that makes returns attractive,” Anand concluded, underlining Verlinvest’s long-term commitment to the Indian market.
