Private Equity (PE) and Venture Capital (VC) investments, which are major contributors in development of several sectors in the country, are likely to touch $70-75 billion till 2015, leading audit and advisory firm Grant Thornton said today.
"We expect $70-75 billion of PE and VC investments in India during 2010-2015," Sudhir Sethi, founder, chairman and managing director, IDG Ventures India and member of IVCA Executive Committee and Research and Data Sub Com told reporters here after the launch of 'The Fourth Wheel'.
'The Fourth Wheel' is a report on PE and Venture Capital (VC) in India, jointly prepared by Grant Thornton and India Venture Capital Association (IVCA).
Grant Thornton India Partner, leadership team, Harish HV said PE funds had now crossed $50 billion over the last six years and 2010 alone saw $6 billion fund flow.
"This year [calender year] the PE fund flow is likely to be around $10-11 billion as India provides huge opportunity compared to other emerging nations," Harish said.
A lot more money is waiting for investment and India provides highest growth rate at 7-8%, mainly in sectors like financial services, infrastructure and domestic consumption, he said.
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This positive fund flow indicates that PE and VC funds will be the fourth wheel, which is moving rapidly, and have thus become the major contributors to the Indian economy and the wealth creation, he said.
This class has created substantial wealth for the industry and there is a need for easier policy framework and relaxation in investment regime, Harish pointed out.
Talking about exit, he said, it is likely to be a challenge and there are likely to be more strategic exits, mergers and acquisitions between PE-backed companies and secondary transactions between PE houses, as the major avenues for exit and Initial Public Offering (IPO), as an option, may diminish till there is a separate mid-market platform.
"The usual period for PE exits in India is about 4-6 years and in 2011 there may be on an average 20-30% of exits," he said.