Indian PEs growing with domestic money?

Indian PEs growing with domestic money? Indian PEs growing with d

Foreign money trickling into the Private Equity
space still is scarce, but now there are wealthy Indians, who want to diversify by parking their money in PE funds.
IT Czar Azim Premji's Rs 230 crore investment
in Subhiksha may have soured, but that's not deterring other high networth Indians from looking at diversifying into private equity investments. The lull in PE fund startups in the last few months is waning.

Malvinder Mohan Singh, group chairman of Religare Enterprises, said, “From the viewpoint of Indian entrepreneurs or business families or just people who want to diversify their asset allocation, I do see a lot of people putting in money into private equity funds. Also, I expect more people to create new PE funds. You will see a mix of both happening."

These are prophetic words from Malvinder especially when the buzz is strong that his company Religare may go it solo by launching a PE fund.
As foreign investors
see redemption pressures, the scope seen in India is huge.

Mohit Khullar, VP of Equirus PE, said, “With global capital becoming scarce, the fund managers are increasingly looking at tapping domestic money during their fund raising. Secondly, the domestic investors, be it HNIs or business families, are increasingly becoming open to private equity as an asset class, which is working in favour of the industry.
Thirdly, having domestic money allows the fund managers to invest in sectors which otherwise have limitations from a foreign investment perspective."

Meanwhile, it’s not just the big Indian businessmen who are bitten by the PE bug. Ajay Relan, former CVCI head, Renuka Ramanath, former head of ICICI Ventures, Subbu Subramaniam of Baring Private and KEC Rajakumar, earlier boss at UTI Venture are also floating their own funds.

Private Equity investments in India totalled $3.5 billion this year vs $10 billion in 2008. Of that amount, the share of domestic investors is still small.

Tanmay Kedia, investment manager at Avigo Capital Partners, said, “It's in single digits now. But going ahead, there is going to be an increase in Indian institutional investors in Private Equity funds and by HNIs too. "

Indian retail investors have participated in private equity funds in a big way in the last 24 months. The next 5-6 months will be crucial as more Indians invest in India-focused PE funds


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