- 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