Sliding PE investments in India?
It was in March-April 2005 that I first wrote a paper (with a PGP2 student Ms Pratima) on Private Equity in India when I was in TAPMI, Manipal. Later in December, 2006 after I shifted to Alliance Business School, Bangalore, I wrote another Conference Paper on Private Equity (jointly with Dr KS Srinivasa Rao) for AIMS International at Hyderabad. In this paper I raised a few queries and issues on this financial product. Interestingly, these doubt I discussed surfaced and in 2008 (may be due to global recession and Stock Market trends in India), there was a downward movement of PE funding in India.
Now the captioned item titled "30 PEs exit India, withdraw $ 1.46 bn" appeared in the Financial Express today, is disturbing. The deal tracking research by VCEdge for the quarter April to June 2010 reveals the above position. It says 30 PE firms have divested stakes worth USD 1.46 billion during April-June this year against 29 PE firms that disinvested USD 820 million in the same period last year. It is time for our policy makers to review the position on an urgent basis and streamline all the rules and regulations pertaining to inviting of foreign investments. Enough is enough. Now, India is heading for 12th Five Year Plan with ambitious goals. There is considerable political stability and investment climate is favourable. Recently, FDI Policy has been improvised and Stock Market index is moving northwards. Let us catch up with this trend.