BS BFSI Summit: Public listings allow profitable exits for PEs, say experts

Investment leaders from Bain Capital, Samara Capital, BlackSoil Capital, and Multiples Alternate Asset Management speak about capital flow, business and startup growth at the BS BFSI Insight Summit

As India’s private equity (PE) and venture capital (VC) landscape matures, leading investment leaders from firms like Bain Capital, Samara Capital, BlackSoil Capital, and Multiples Alternate Asset Management express a growing optimism regarding the for growth potential of the sector, capital deployment opportunities, and strategic exit paths. Speaking with Business Standard’s Suveen Sinha at India’s biggest banking, financial services, and insurance (BFSI) event, the Business Standard BFSI Insight Summit on Friday, the industry captains discussed the current market dynamics and the renewed interest in public markets as a viable exit route for private investments.

 

Public market exits spur deal flow: Ashish Kotecha

For Ashish Kotecha of Bain Capital, the current environment is one of the most promising in recent years. “Public markets have rebounded, opening up attractive exit opportunities for PE funds,” he said. Successful public listings allow long-term PE-backed firms to achieve profitable exits, and Kotecha noted that Bain Capital has witnessed this resurgence first-hand, with active deals and dialogues with potential investors.

 

 

“Today you can write billion dollar cheques in India. Earlier there was a question if you can exit the Indian markets. Over the years, exits are possible at scale,” Kotecha said. He explained that Bain Capital finds the influx of public market options stimulating, with potential investees considering future IPOs but still relying on PE for early-stage support.

 

“The volume of deal flow is the highest it has been since we started in India in 2008,” said Kotecha, crediting the changing landscape with boosting dialogue with promoters.

 

PE provides options for companies: Sudhir Variyar

Sudhir Variyar from Multiples Alternate Asset Management remarked on the broader evolution of PE in India over the past two decades, especially as regulators and policymakers began to recognise its value in supporting business growth and offering exits for entrepreneurs. Private equity plays a significant role in providing capital solutions, especially for companies that have reached a certain scale but require fresh capital and expertise to progress further.

 

“Private equity can provide comprehensive solutions as companies mature, especially in areas like ‘Viksit Bharat’ [Developed India],” he said.

 

“Public market has always had a limelight, it affects more people. Private market has always been more quiet,” Variyar said while explaining that the spotlight on the public market did not negatively impact business flows. “PE has developed well, we are seeing a lot of deal flow.”

 

“Maturation is a continuous process. When you talk to Indian PE managers vs global, the playbook is more or less similar. Earlier it was public market investments primarily, and now that is evolving,” he said.

 

Growing appetite for alternative investments: Abhishek Kabra

Abhishek Kabra of Samara Capital notes a rising demand for alternative investments, such as unlisted equity, allowing investors to diversify beyond public markets. Kabra explained that while public markets remain the primary focus for most investors, there’s a shift towards private investments as portfolios grow. This demand is especially relevant for private equity firms, which are seeing increased interest from investors keen to tap into unlisted assets.

 

Kabra pointed out that this trend has kept PE activity robust, with interest not only in private assets but also in public companies. “The strategy is to maintain a consistent approach and expand assets under management,” he said, explaining the importance of steady capital inflows to support company buyouts and scale.

 

“PE is as busy now as we have always been, but now, we are also seeing a lot of interest in the public side,” he said when asked about the current limelight on the public market and its impact on PEs.

 

Drop in equity supply, resurges demand for debt: Ankur Bansal

Ankur Bansal of BlackSoil Capital highlighted a significant shift in the venture ecosystem. After years of volatility, VC-backed companies have refocused on strengthening business fundamentals, addressing critical operational aspects, and building long-term value. Bansal noted that public markets have recently become a key channel for VC-backed firms to exit their investments, offering an essential platform to access capital and fuel growth.

 

With a reduction in equity supply, demand for debt has surged, providing companies with rapid access to funds for operational needs. Bansal explained, “2022-23 was a phase to cut losses, whereas 2023-24 and beyond is all about growth.”

 

He said profitability is now a primary concern for many startups, with earnings before interest, taxes, depreciation, and amortisation (Ebitda) – a measure of profitability that excludes certain expenses – now a focal point for investors. “The ecosystem is preparing for public market entry,” said Bansal, adding that while not all companies will reach IPO status, many are ready for growth capital.

 

As India’s PE and VC sectors advance, investment leaders agree that the demand for diverse investment channels, and the growing dialogue between investors and policymakers are expected to continue fuelling growth in India’s alternative investment space.