December 20, 2012
Interviewed by: David Snow
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Outlook 2013: Private Equity in India

2013 outlook from Mayank Rastogi, a partner in the Private Equity and Transaction Advisory Services division of EY India.

2013 outlook from Mayank Rastogi, a partner in the Private Equity and Transaction Advisory Services division of EY India.

Privcap: What do you predict will be the most important trends in Indian private equity in 2013?

Mayank Rastogi, EY: I think 2013 clearly will be a year of shake up. I think it has started. You go back into Indian PE history. And a lot of India-centric funds got raised in 2004, 2005, 2006, that kind of vintage. I think they’re coming towards end of their term. A large part of them haven’t really, or will not end up returning the kind of money they promised their LPs they will.

And I think so you will see the more serious guys  sustain, live for another day. But I guess a lot of them will just go away. So you will see clearly greater consolidation.

Privcap: In a less frothy market, are GPs paying more attention to the operations of their portfolio companies?

Rastogi: I think it is now about investing, nurturing, and then actively looking for an exit. So I think that evolution has happened. A lot of funds are looking at operating improvements. They’ve actually hired a whole host of operating teams, et cetera, to help them nurture the investments. And that’s a big trend that’s being seen and I think will play out a greatly over 2013.

Privcap: How has India’s venture capital market evolved?

Rastogi: There is an investor class now in India, which is looking to actually invest in alternative assets. So you have a very, very healthy angel investing network that is building up. And that has really helped some of the businesses grow up. So we clearly seeing that as a trend, a whole host of angel networks that are building up.

The other thing is that we’re moving beyond technology when it comes to early stage investing. So there is new delivery systems around health care. There is financial services models with a more financial inclusion. So anything that– early stage businesses helping consumers is where we’re seeing a lot of venture capital activity.

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