Optimizing the regulatory landscape and exits
The private equity and venture capital (PEVC) ecosystem in India has played a pivotal role in providing a much needed growth and high-risk capital to companies and businesses in India over the last fifteen years. Since early-2000s, PEVC funds have invested over USD 150 billion in India and also generated market-beating returns. While 2016 turned out to be a year of micro-correction, it also saw large pension funds step up their bets on India.
Looking ahead, India is on the cusp of a renewed growth-trajectory, and the private equity industry is geared to partake in this growth story. Buoyant capital markets, hot merger & acquisition opportunities, and vibrant economic outlook are helping shape a favorable investment environment in India, as well as, opening doors for profitable exits. Further, with over USD 42 billion worth of large ticket (greater than USD 50 million size) private equity investments over two years in vintage still un-exited or partially exited, exit activity is also expected to pick up in the near future.
This Deloitte India paper is an effort towards understanding the impact of the regulatory changes in the Union Budget 2017 on the private equity industry, the recent private equity exit experiences, their future outlook, and a deliberation on the development of the fund of funds industry in India from a regulatory perspective.