Venture capitalists and private equity players are now working overtime when it comes to new investments. Due diligence is taking more
time than before.
Anywhere between $5 to $ 8 billion is waiting to be pumped into the Indian market in the form of private equity. Slowdown-free sectors like healthcare and education are hot picks, besides those catering to domestic consumption.
"Right now, we are evaluating proposals in diagnostics, logistics and energy saving," says Srini Raju, co-founder of Peepul Capital. His fund has a war chest of $220 million of which $150 million has been invested in telecom and manufacturing companies.
The global slowdown and rupee appreciation has led to a shift of focus from exportoriented firms to ones meeting local demands. "Even foreign VC funds are keen to invest in local industries," says Srini Vudayagiri, long time private equity and angel investor. So much so that even micro finance related ventures is finding favour with foreign funds.
And with the new government coming into power, there is renewed interest in infrastructure projects as well. Retail and other consumption driven industries having a strong focus on tier II and tier III markets are also being favoured by private equity players.
In technology, VCs/PE players are looking at those companies which derive revenues from alternate markets instead of just America. "They are looking at a balanced play portfolio with multiple engines of growth," says Sameer Mehta of Atlas Advisory. Venture capitalists are now stringent on exit strategy. "Exit scenarios are more definitely spelt out in the term sheets than ever before. The documentation covers scenarios like what if the IPO doesn't happen within the stipulated time period. Earlier, such issues were relegated to the periphery," says Vudayagiri.
Fluctuating rupee has also forced many investors especially foreign funds to protect their dollar value and that is now clearly spelt out in term sheets. While private equity funds are normally known to take the company to the IPO stage, managers are exploring other exit options like selling stake to growth stage funds.
time than before.
Anywhere between $5 to $ 8 billion is waiting to be pumped into the Indian market in the form of private equity. Slowdown-free sectors like healthcare and education are hot picks, besides those catering to domestic consumption.
"Right now, we are evaluating proposals in diagnostics, logistics and energy saving," says Srini Raju, co-founder of Peepul Capital. His fund has a war chest of $220 million of which $150 million has been invested in telecom and manufacturing companies.
The global slowdown and rupee appreciation has led to a shift of focus from exportoriented firms to ones meeting local demands. "Even foreign VC funds are keen to invest in local industries," says Srini Vudayagiri, long time private equity and angel investor. So much so that even micro finance related ventures is finding favour with foreign funds.
And with the new government coming into power, there is renewed interest in infrastructure projects as well. Retail and other consumption driven industries having a strong focus on tier II and tier III markets are also being favoured by private equity players.
In technology, VCs/PE players are looking at those companies which derive revenues from alternate markets instead of just America. "They are looking at a balanced play portfolio with multiple engines of growth," says Sameer Mehta of Atlas Advisory. Venture capitalists are now stringent on exit strategy. "Exit scenarios are more definitely spelt out in the term sheets than ever before. The documentation covers scenarios like what if the IPO doesn't happen within the stipulated time period. Earlier, such issues were relegated to the periphery," says Vudayagiri.
Fluctuating rupee has also forced many investors especially foreign funds to protect their dollar value and that is now clearly spelt out in term sheets. While private equity funds are normally known to take the company to the IPO stage, managers are exploring other exit options like selling stake to growth stage funds.
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