India has emerged as an attractive destination for both foreign and domestic investors largely due to improving regulatory framework and private equity (PE) investments this year may set a new benchmark, says a report. Domestic PE investment is rising and stood at USD 3.41 billion last year and crossed the peak of USD 3.3 billion set in 2007, it said, adding that this year may set new benchmark. “The recent state election results have only reaffirmed that the central government will keep working on improving and introducing newer policies that are aimed at growth of different sectors, including the important real estate sector,” said Shobhit Agarwal Managing Director — Capital Markets and International Director JLL India.
While domestic PE investments in 2015 stood at USD 1.77 billion, it doubled in 2016 to USD 3.4 billion. Meanwhile, foreign PE investments, which stood at USD 1.54 billion in 2015 increased to USD 1.85 billion in last year.”Looking at this data, it can be said that that equity investment is on a return journey to India and rising consistently in the last three years,” Agarwal said. Besides, local knowledge also makes them more confident investors than their foreign counterparts that do not necessarily get to witness all the positive changes taking place in India, he added.
The overall “positivity” in the business scenario will, in turn, attract more foreign businesses and investments into India and will also improve the domestic investor sentiments. “Already, in the last two years, a change has been witnessed in the private equity investment scene wherein investment from domestic sources has been exceeding that originating abroad,” Agarwal said, adding that most notably, total domestic PE investments in 2016 crossed its peak seen in 2007.