Private equity (PE) investments in the country have potential to touch USD 40 billion over the next 10 years, says a report.
The report, based on the inputs from over 40 partners and principals in PE houses, expects the PE industry to contribute to the growth of the country's economy on a larger scale than earlier.
"Over the next 10 years, deals, both in size and nature, will increasingly turn closer to those in some developed countries with a potential to reach USD 40 billion in 2025 in the country," a PwC report on 'PE in India 2025 - A USD 40-billion decade beckons?' said. The total PE investments in the country stood at around USD 9 billion in FY14 and is likely to touch USD 10-12 billion in the current fiscal. The report said the next investment cycle will represent a more mature phase of investing in the country.
It believes that the industry will consolidate with perhaps 70 to 80 significant players. While venture and growth opportunities will continue apace, the industry believes that buyouts will be the biggest investment theme over the next decade as India Inc deleverages and exists non core businesses. "Consumer-centric businesses have been big themes for equity investors over the last few years. While this will continue, Indian consumerism is expected to embrace the rural markets as well over next five years, as growth reaches the interiors of the country," PwC India's leader (private equity), Sanjeev Krishan, said.
The report stated that funds have increased their emphasis on diligence today as never before. The diligence has become intensive with much focus on getting to know the sector well, which means speaking to other operators in the industry, point of view discussions and learning from previous experience of investors in the sector, the report said. Krishan said PE investors are eager to support domestic companies, with proven local presence, to expand in overseas market.