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Wait And Watch: The Year Ahead

What 2017 will not yet bring is the happy arrival of an honest citizenry or a transparent bureaucracy or an enlightened political class

Photo Credit : Ritesh Sharma


The year 2017 promises to be an intriguing year. With the demonetisation and its ripple effect, the year will be disruptive at least for the first two quarters and sectors such as real estate will feel the immediate impact. Regional politics will play out quite sharply, with a marked effect on investor sentiments. The solemn promise to eradicate black money and corruption will be slow to actualise. The distressed balance sheets, nervous lenders and fractured sentiments for industrial growth will, all in all, not add too much to the India Shining mantra.

So, from my point of view, we are gearing up for perhaps more complicated and more intriguing times with each deal taking longer to get through the pipeline than before. The private equity clients tell us that they have a lot of dry powder but they also tell us that they are in a wait-and-watch mode. While fintech and pharma are the current darlings of PE, PE investments in infrastructure and road sector and real estate will be slower than the government would like.

The good news is that India remains a sweet spot for global investors in the emerging markets. China has undoubtedly slowed down and India’s gifts of democracy and an English speaking nation are far too attractive and cannot be ignored. With a demography that defies belief and the aspiration of a middle class that is unparalleled, India is on its way to becoming a world economy, despite its many pain points.

In some way, I feel 2017 and the next few years will be one of catharsis for corruption. The policy paralysis will soon have to flush itself out. The politics at the centre should be stable and absent. Modi seems to be set to come back for at least a second term. With politics getting more regional and religion and caste playing far too important a role, it is important that the political leadership is acutely aware of the dangers of communal disharmony and works towards a unified India.

As the managing partner of a law firm, we believe, our work will continue — the pace will be reasonably brisk. The coming years will entail advise in relation to distressed assets and resolving many twists and turns with the non-performing assets being acknowledged by banks, specially given the advent of the new Insolvency and Bankruptcy Code.

What 2017 will not yet bring is the happy arrival of an honest citizenry or a transparent bureaucracy or an enlightened political class. This must change and is the only way forward. However, I am a great believer in small steps. This should come sooner rather than later. India is sure to find her global seat and shine.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Zia Mody

The author is Managing Partner, AZB & Partners

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