The global private equity market and related M&A deals are down in the first three months of the current calendar year, but Indian market is expected to witness hectic activity. The overall level of investment activity in the Indian private equity market will increase, said 84 per cent of the respondents to the India private equity confidence survey by Deloitte Corporate Financial Services.
"Private equity could grow faster in India than rest of the world," said Alan Alpert, global head, transaction services, Deloitte while launching its dedicated private equity practice in Mumbai on Wednesday.
"Most of them say they would like to do proprietary deals and most deals will move towards auction," said Sandeep Gill, Managing Director of Deloitte Corporate Finance. Increased competition is also likely to push up valuations. "Three years ago we were typically competing against two-three players on a deal, now that is more like five-six," says the survey. One in five respondents felt competition would lead to decline in returns.
The next six months would also witness as much exit activity and the stock market is considered to be a viable exit option. "It’s the best ever market to be selling – people will pay ‘crazy’ prices," goes a quote which supports 84 per cent votes for increase in exit activity in the private equity market.
The survey conducted among 40 private equity players active in India has voted development capital to be the most popular type of transaction in the Indian capital market.
Protests against private equity have been highly visible, especially in UK for the past few months. Complaints against them range from job losses to asset stripping. "That is mainly because of lack of communication from the private equity players," says Timothy Mahapatra, partner, transaction services based in London. They are also getting lot more transparent, Mahapatra added.