Motivated by Modi Govt, PE Funds to Raise $2 Billion
Change in power at the centre has brought in a new sentiment among private equity (PE) funds, so much so that around half a dozen PE funds have started to raise $2 billion together from local as well as foreign investors. Four renowned PE funds are already in talks with the investors, while three more have renewed their previously shelved plans.
The development of infrastructure in India has been on the main agenda of the Modi government, as it will provide the much needed fillip to the Indian economy. Counting on Modi agenda, ICICI Venture, India’s second largest PE fund, came about, considering that these large scale projects will require massive equity.
After a drop in the country’s economic growth, from 8% in 2007 to 5% in the fiscal 2013 and 2014, investors cringed to be a part of the market. The PE funds that invested more than $50 billion were not able to exit their holdings either, when the company valuations went down. There were hardly any returns from private equity, which in turn discouraged the Limited Partners from investing afresh.
Now, with the opening of the window for public offers, raising funds will be easier for those who have a good reputation in this industry and can showcase a good track record. The PE funds that can uphold these parameters will benefit over the others, says Vikram Utamsingh, the director of transactions advisory group at Alvarez and Marsal.
Source: The Economic Times
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