The Indian economy is undergoing a huge change. The present market health has averted foreign investors from acquiring an optimistic approach towards the economy; thus creating a severe void in market capital, besides many other issues. This has further harmed the market sentiment. But in a time like this, domestic private equity (PE) firms have held the flagpole and have led the forward journey.
Despite the global crisis and recession, the GDP has managed to maintain an upward journey, and this can be accredited to the flourishing commerce, upcoming entrepreneurship and rise of the middle class, which is a direct result of growing private equity investments.
In the previous year, we had as much as over USD 9 billion of PE funding involved in the organized sector of the market, which is still increasing. The various market sectors such as metals and alloys, energy, manufacturing, hospitality, warehousing etc. have all been invaded by these firms.
PE is expected to contribute almost half of the USD 1 trillion amount that will be dedicated to the infrastructural growth, from 2012-2017. Moreover, the increasing entrepreneurships and the tendency to take risks among the Indians have made PE firms even more vital. There are mushrooming start-up ventures that are in need of capital procurement. Thus, the future of Indian private equity is quite promising.
India has the potential to become the second largest economy by 2050, but with the right market strategy. This status would be accredited to the healthy investments in real estate, infrastructure, and domestic retail market. The government policies have also become flexible to foster PE investments, as the economists are assuming that the future of our economy is through private equity. Moreover, the increasing inclination towards entrepreneurship also paints a rosy picture for the future, as fresh successful ventures are the key to market growth.
Today, India needs the financial cushion of private equity more than ever to surge its economic growth and to meet the required development benchmarks. It not only aids the growth of a company, enables it to hire more people, and increases productivity, but it also can be a driver of change.
By creating more opportunities for employment and fostering overall affluence in the society, it can also help to eradicate poverty, in raising India’s economic stature, and in creating better opportunities for individuals as well as companies.
However, for the efficacious implementation of this growth scheme, right partnerships are vital. It is only if an ideal coalition is established that they can seize the apt market opportunities and open up new dimensions, thus fostering the overall economic growth of the country.
About the Author
While his background is mostly related to trading stocks, he recently gained interest in real estate crowdfunding with Fundrise.