Was 2007 the year of excess for India’s private equity industry? When the announced value of deals hit $19 billion by December, it did seem unusually high. Around early November, as many as eight senior executives in the industry privately voiced concern about things getting out of hand. Some of those fears now seem to have been validated by the recent crash in the capital markets and the subsequent ‘falling through’ of two high-profile deals — ICICI Venture pulled out of a $800 million investment in Jaypee Infratech and Indivision called off an investment in DishTV. Suddenly, nobody is quite sure about how much of that $19 billion will actually be cashed by promoters of companies.
The red flags are out in the private equity industry and it is certainly a time to tread with caution. In the longer term, this could just be the one of the best things to happen to Indian private equity. To find out why, read here…
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