Motilal Oswal PE seeks tax exemption for fund investors

These are long-term investments, which last for around seven years and therefore should be granted the tax-free status, says company's CEO

Stating that private equity funds invest with a long-term horizon in a company, head of brokerage Motilal Oswal's private equity arm today demanded tax exemption for investments into such funds.

"These are long-term investments, which last for around seven years and therefore should be granted the tax-free status," Vishal Tulsyan, chief executive at Motilal Oswal Private Equity said at an industry event here.

He said the private equity funds, which have been facing a tough time due to the gloom on the economic front, should also get tax-free treatment enjoyed by long-term investments in mutual funds and infra companies.

Tulsyan asserted that private equity funds also contribute to "nation building" and pointed out towards the creation of 1,00,000 jobs through the Rs 500-crore which his company invested from its first fund.

Its investments from the first fund include Cremica and Gowardhan Milk, among others. The company closed its second fund, a $155-million corpus, last September and has already invested a part of it in two companies.

It can be noted that the private equity funds have been having a different patch for the last two years as the markets are witnessing subdued activity, which take away funds' most sought-after exit route. This, in turn, has made the investors who put in money in such funds, nervous.