The global credit squeeze worries still continue, as India may see a slow down of private equity (PE) deals in the country, say industry players. With more and more dedicated India specific funds coming up, India ?s growth story in the long run is definitely progressive. However, the sub-prime lending crisis seems to be affecting the flow of funds temporarily.
Alok Mittal, executive director, Canaan Partners (India) is of the view that the global credit squeeze may slow down PE deals in India, but the pace of venture capital funding would remain strong. ?Some of the larger private equity deals reside on debt which is not the case with VC. Hence the involvement of debt component might slow PE deals in the country.? There was a whopping $3.2 bn investment by PE firms across 76 Indian companies during the quarter ended June 2007, according to a study by Venture Intelligence, a research service focused on private equity and venture capital. The amount invested during the quarter was higher than that during the same period last year (which witnessed 67 deals totaling $1.9 bn). Says Arun Natarajan, founder and CEO, Venture Intelligence India, ?PE investment in the advanced stages of a company?s growth, might see a little slow down in India as they may prefer to wait and watch the situation and see how the public market may shape up before investing,? he adds. Industry players feel that there is a financial uncertainty at present.