A recent posting on the WSJ blog Venture Capital Dispatch, "Sequoia Capital Seeks Bigger Role in India's Maturing Venture Industry" highlights Sequoia's venture capital strategy in India.  According to the post, Sequoia Capital India is investing out of its third fund of $725 million, and will look to raise a fourth fund in the second half of next year.  The posting also indicates that Sequoia targets a 3-5x return in a 3-5 year time frame.

The posting also suggests some challenges for venture capital in India: a slowing economy and a difficult IPO market.  In previous posts, a number of other challenges for investing in India have been identified, including:

• Inconsistent tax policy
  
• Poor corporate governance
• Entrepreneur control issues
  
• Fierce competition for deals
  
• Investment holding periods have lengthened
  
• More attractive investment opportunities in other areas in the region
  

Here's a link to the posting:  
http://blogs.wsj.com/venturecapital/2012/08/06/sequoia-capital-seeks-bigger-role-in-indias-maturing-venture-industry/

Here's a link to my prior post on challenges of investing in India:  
http://www.allenlatta.com/1/post/2012/07/global-investors-put-indian-private-equity-on-hold-the-times-of-india.html

Today's article in The Times Of India "Global investors put Indian private equity story on hold" provides a glimpse of some of the challenges currently facing private equity investors in India.  Among the issues cited by the article:

• Slowing economic growth
  
• Inconsistent tax policy
  
• Poor corporate governance
• Nature of PE in India - investments are typically minority stakes
• Entrepreneur control issues
• Poor returns
• More attractive investment opportunities in other areas in the region

As a result of the above, the article predicts that the India PE industry is expected to contract in the future.  

In a post last month discussing a Reuters article, the following issues were also identified:

• Fierce competition for deals.
  
• Few willing sellers.
• A regulatory ban on leverage.
• A fickle market for exits through IPOs.
• Investment holding periods have lengthened.
• India's economy has weakened as growth has slowed.
• Public share prices have slumped.

Here's a link to the article:  http://timesofindia.indiatimes.com/business/india-business/Global-investors-put-Indian-private-equity-story-on-hold/articleshow/15163018.cms 

Here's a link to the prior post on India PE:  http://www.allenlatta.com/1/post/2012/6/rupee-slump-deepens-india-private-equity-quagmire-reuters.html 

Private Equity investments are facing challenges in India, according the the Reuters article "Rupee Slump Deepens India Private Equity Quagmire."  According to the article, current challenges include:

• The Rupee has slumped by 20% and is Asia's worst performing currency over the past 12 months.
• Fierce competition for deals.
• Few willing sellers.
• A regulatory ban on leverage.
• A fickle market for exits through IPOs.
• Investment holding periods have lengthened.
• India's economy has weakened as growth has slowed.
• Public share prices have slumped.

Here's a link to the article:  
http://in.reuters.com/article/2012/06/26/india-privateequity-idINL3E8HE62I20120626