1. Private Equity
scenario in India . .

2. Introduction
PE industry is about a decade old (1999) .
Benchmarks -
2004 The total deal value crossed 1.45 bn USD. (for 1st
time)
2007 Peak deal value of 14 bn USD.
2010 Overtook China (in terms of deal value) for a short
while
2012 It currently ranks 6th.

3. 4 sequential steps in PE
1. •FIND
2. •INVEST
3. •HOLD
4. •EXIT

4. The million $ Q’s .
1.What determines the rate of return
on Exit ?
2.Extent of influence of –
Fund manager on the exit strategy.
b. The sector on the exit strategy.
c. Life of the fund.

5. 3. Which type of exit generates best
return and why
4. Do ‘promoter preferences’ on Exit ,
matter ?
5. If yes , then how the conflict is
resolved ?
6. Is there any connection between
entry and exit type ?

6. Uncontrollable Controllable
1. The factors that prevail in the 1. The choice of sector .
system and are beyond our
control. 2. Selection of firm.
2. Eg. Global economic slowdown in 3. How much to invest.
2009 .
4. Entry strategy .
5. Type of exit .
6. When to exit.

7. How Indian market was Risky for PE funds ?
• Political and regulatory uncertainty
• Weak corporate governance
• Family owned businesses
• Difficulties in exiting through IPO
• Compliance issues

8. Returns from Indian PE

9. Sensex return v/s PE return
2003-2010

10. PE returns across Asia and other
countries

11. Positives of PE
• PE helped mid market companies deliver
professional services.
• Direct impact on – business model , corporate
governance , professional talent management
of portfolio companies.
• PE enhanced company’s reputation with
banker’s and capital markets.

12. Conclusion
• The PE industry in India is as old as the life span of a
typical PE fund.
• Nearly 30% of PE deals likely end up generating
negative returns.
• High cost of entry.
• Positive future.