CDPQ sharpens focus on Indian renewables, infrastructure

The Canadian pension fund believes that India’s long-term growth potential will continue to provide attractive investment opportunities for foreign investors.
CDPQ sharpens focus on Indian renewables, infrastructure

Caisse de dépôt et placement du Québec (CDPQ) has been making a deliberate push to grow its C$402 billion ($300 billion) portfolio in key sectors such as digital and sustainable infrastructure, mobility, and energy transition across Asia Pacific — and India is a large part of that strategy.

“India remains a strategic market for CDPQ because of the region’s potential for long-term growth driven by favourable demographics, a rising middle class, and strong entrepreneurial culture,” Saurabh Agarwal, managing director for Infrastructure in South Asia at CDPQ India, told AsianInvestor.

Saurabh Agarwal,

The Quebec-based fund set up its New Delhi office in 2016, and Agarwal has directed the fund’s infrastructure activities in South Asia since March 2017.

“From our office in New Delhi, the team has a deep knowledge of the Indian market and focuses on infrastructure, where we believe there will continue to be attractive investment opportunities, particularly in renewable energy and for our Maple Highways platform,” said Agarwal.

CDPQ had $6 billion in total investments in India as of end-2022, and the fund is currently the third largest state investor in the country’s infrastructure sector, behind Singapore’s GIC and fellow Canadian fund CPP Investments.  

In the infrastructure space, CDPQ's assets include the Shree Jagannath Expressway in Odisha state, Maple Highways (operator of Highways Concession One), TVS Logistics, and renewables-focused power producers Apraava Energy (formerly CLP India) and Azure Power.

In addition, the fund has also invested heavily in offices, logistics properties, and financial services, but it may seek to develop its exposure to venture capital, which is currently very limited.


In terms of foreign direct investment (FDI) trends, India has become an increasingly favoured destination according to Prashant Bhayani, chief investment officer Asia at BNP Paribas Wealth Management.

Prashant Bhayani,

“India received the highest ever inflow of FDI of $84.8 billion in 2022,” Bhayani told AsianInvestor. “Prime Minister Modi’s ‘Make in India’ has boosted its attractiveness as well as the reorientation of supply chains post-pandemic, which is a new longer-term trend.”

India has benefited from positive foreign portfolio flows and was the only major country that saw positive flows in Asia in 2020, and one of the three in 2021. However, China’s reopening has finally led to portfolio flows back to North Asia, said Bhayani.

“In that regard, India’s equity market also outperformed its Asian peers and traded at a large valuation premium by mid-2022. We began to see outflows in the later part of 2022 and moderate outflows early in 2023,” he said. 

Also read: ADIA eyes India's burgeoning renewables sector

Momentum in the short-term appears to favour North Asia, as the region underperformed and investors were significantly underweight last year. This reallocation is starting to normalise and Bhayani expects flows into India to pick up longer-term.

“In the longer term, we expect India has its advantages as increasingly a potential core allocation for foreign capital both in FDI and portfolio flows,” he said.


Investments will continue to be the biggest growth driver for India in the near term, fueled by public spending, while consumption remains the main driver over the longer term, according to James Thom, senior investment director of Asian equities at abrdn.

James Thom,

“In a pro-growth budget for the 2024 fiscal year, the Indian government once again doubled down on its public Capex push, making it a strategic priority to support growth, create more jobs in the economy, and gradually spur widespread private Capex,” Thom told AsianInvestor.

Whilst consumer spending is slowly on the mend, it faces near-term pressure from inflation and higher borrowing costs due to rising interest rates.

“There are a couple of downside risks to the Indian economy: first, higher fuel prices could result in margin pressures and rising costs as India is a net importer of oil,” said Thom.

“Secondly, if interest rates continue to trend higher, rising borrowing costs could dent or slow down consumption — the RBI, for its part, paused its rate hike during the April policy meeting.”

India is also seen as one of the beneficiaries of supply-chain diversification as companies seek to reduce their reliance on China as the sole manufacturing base.

“For its part, the Indian government has stepped up initiatives to turn the country into a global manufacturing hub, with campaigns like ‘Make In India’ as well as production-linked incentive schemes designed to spur companies to shift their production bases to India, in addition to favourable tax rates, an easier land acquisition process, and the repealing of a controversial retrospective tax law,” said Thom.

Also read: KIC eyes India expansion

Apple is one of the latest and most prominent companies to shift parts of its iPhone assembly to India, away from Chinese factories run by its Taiwanese assemblers, he said.

BNP Wealth Management's Bhayani also notes the accelerated investment in infrastructure as one of India’s primary growth drivers.

“India is in need of major infrastructure development, which has accelerated in recent years, and in the new budget it increased again [to] 2.5% of GDP. This is another area which requires focus in coming decades, which would unlock economic growth,” said Bhayani.

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