Category: India

Private Equity Investing in India - The Economic Times Post

11/30/2013

There's a recent post in India's The Economic Times titled "Private Equity Funds Face Tough Challenges Today" that I found very interesting. The post highlights a number of challenges facing private equity in India:

Poor returns
Overpricing by GPs
Businesses failing to meet growth forecasts
Over-intermediation (a highly competitive investment banking environment where bankers over-promise)
Poor performing IPOs
Reluctance of Indian business owners to give up majority control, leading to fewer sale transactions
Fall of the rupee negatively impacting US dollar denominated funds, as currency hedging is not a market practice.

Here are links to my prior posts on difficulties investing in India:
http://www.allenlatta.com/1/post/2012/08/sequoias-india-strategy.html
http://www.allenlatta.com/1/post/2012/07/global-investors-put-indian-private-equity-on-hold-the-times-of-india.html
http://www.allenlatta.com/1/post/2012/06/rupee-slump-deepens-india-private-equity-quagmire-reuters.html

Link to The Economic Times article:
http://articles.economictimes.indiatimes.com/2013-11-29/news/44575456_1_gps-indian-private-equity-rupee-fall

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Sequoia's India Strategy

8/7/2012

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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

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Global Investors Put Indian Private Equity On Hold: The Times Of India

7/26/2012

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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

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Rupee Slump Deepens India Private Equity Quagmire: Reuters

6/26/2012

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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

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Emergence of India's IT Industry: Washington Post Article

11/28/2011

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There's a recent article by Vivek Wadhwa posted on The Washington Post's website that highlights the continuing evolution of India's information technology sector that I found interesting. In my view, the title of the article ("Why Silicon Valley should fear India) overstates the case, it does demonstrate that entrepreneurship and innovation are growing rapidly in India. Here's the link: http://www.washingtonpost.com/national/on-innovations/why-india-should-scare-silicon-valley/2011/09/14/gIQALjiolN_story.html

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Innovation in India: The Atlantic

11/13/2011

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Interesting article on innovation in India that recently appeared in the Atlantic: "India: The World's Secret Silicon Valley." Here's the link: http://www.theatlantic.com/business/archive/2011/11/india-the-worlds-secret-silicon-valley/248341/

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Private Equity Investing in India - The Economic Times Post

Sequoia's India Strategy

Global Investors Put Indian Private Equity On Hold: The Times Of India

Rupee Slump Deepens India Private Equity Quagmire: Reuters

Emergence of India's IT Industry: Washington Post Article

Innovation in India: The Atlantic

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