Do you think so Private Equity Investor will be back due to installation of a stable government at the Centre?

I agree with Mr. Ameya. We have got ample space in our country and affordable employees to execute the operations, the government should make special efforts to exploit these opportunites to boost up the investments in India.

Surely a good and stable eceonomy and government attracts investors and makes the market flourish. However when you speak about the market in Indian context, the government should not just sit on their laurels for their acheivement in past 5 years. The scenrios are pretty different today. There are efforts which would need to be taken to pull in more forign investments and attract mroe companies to setup their operations in India. The advantage being that we have got ample space in our country and affordable employees to execute the operations, the government should make special efforts to exploit these opportunites to boost up the investments in India.

A stable government and good corporate governance are essential for attracting PE Investment just like FII.

Though much was not heared about PE investments in India till recently and many PE giants shying away from making big commitments and PE investments expected to fall by more than a third by the end of 2009, I believe it has a strong future provided the necessary  is done. With stock market down many Indian companies will be looking to raise funds through PE. Last year though PE Investments dropped, India was the top in Asia in terms of deal value.

The Satyam scam, the case of Subhiksha and the market crash are restricting PE firms entry. Especially going for an investment in an unlisted company is highly risky as there is no exit route. The opening up of sectors have given more options to PE firms. India is still an attractive destination for PE funds. In one of the biggest PE equity deals in India between Warburg Pincus and bharti Airtel an investment of $300 million realized $1.8 billion. The bottom line in PE Investment is good and rewarding economic conditions. A stable government is one of the requirements for winning PE investor’s trust.

India is in a close tussle to top the list of most attractive emerging markets for private equity  investment over the next three years in the Asia region, followed by the developed economies of Japan and Australia.

Indian PE performance peaked last year mainly due to the fact that there are  private enterprises in India which are attractive to PEs. Though India has always had a higher percentage of private sector companies , it is only in recent years that there has been a spreading of awareness among the investing community of the strong education system,

English language proficiency, legal & financial structures and democratic governance and a stable government in the country, definitely indicate a positive influence This awareness, combined with sustained growth, has and will in future led to increase in PE  investments in India.

Yes, as the World Economic scenerio is bad in particular the world leaders , with no stability in Government Policies and functions, and that our economy is not in such a bad shape, people in foreign will be motivated to invest in Working Economy rather than a non-performing economy. Hence, it is assumed that a strong and functional Government supporting Development will try to attract foreign investments.

A strong Government will attract foriegn Investments

Installation of a stable govt. is only one of the reason for the recovery of the market. there is no change in govt. or the party who is governing is the same. That is why insvertor feels that there will not be any change in the major policies of the govt. This time there is no left party. This is also one of the reason that insvestors are back in full flow in the market and the market has recovered. The recession if not full atleast has come down. These I think are some of the resons why the market has recovered.

Private Equity players are not in big terms here in India. The last heard of was Barring Partners with a corpus of around 5bn $, which I feel is not big enough to make large acquisitions, may be small ones. Last heard they picked up partnership or has supplied growth funds to JRG securities which is not that big an organization. KKR Partners seems to be trying to get in with UB where they are having competition with Diegeo.
I think they are not in big way like they are in US where KKR Partners and others make direct acquisitions worth 30's and odd bn dollars. I feel they will only be in for large equity in feasible companies not out right acquisitions and management. This might happen not long in future once they get used to the Indian seen. KKR I think is looking for 19% share holding in UB.
KKR at the same time makes acquisitions to the level of acquiring Texas Utilities for 38bn $. So it is very small in India.

The unexpected election results paving the way for a stable government took all by surprise. The uncertainty over the government formation is out of the way and the Government is in a position to intiate measures favourable to investment in India. There will also be a continutity in the fiscal measures announced prior to elections and further economic reforms   in banking, insurance sectors are to follow. Auto-fuel   price de-control is on the cards.Power, Infrastuctuere all going to get a priority attention. All these augur well for the investors. As the PE investors will be able to spot more potential companies the PE placements may increase to a great degree. Already such deals have taken place in the past sensing the chance the indian companies offer.

I feel Strategic investors may have close look on the sentiment of the market which has changed. Valuations are expected to firm up since the economy may be bottoming out. There are also strategic investors who wanted to do deals (read buyouts/acquisitions) but held back because they were not sure if valuations would drop further. I think they will hit the market again now.