Thursday, May 1, 2008

'In India debt has not been a crucial method of funding PE deals.'

PE deal space in India could benefit from sub-prime crisis

FedEx, Apple, Cisco, Genentech and Microsoft are not just household names, they share a common lineage: That of private equity (PE) funding. Little-known companies then, these entrepreneurs wanted to raise capital but found no support.
But on the way came across the ‘gentlemen’ who obliged. In exchange, a stake was all that was asked for. The rest, as they say, is history. But that was years ago. Today, the situation is a bit different, especially with the sub-prime contagion that has taken out some of the well-known firms across Wall Street. Liquidity is clearly not as easy as it used to be.
Will Indian companies and their promoters have a torrid time in searching for the ‘deal’ that could possibly change things? Not likely, if you go by numbers, says Mr Vikram Utamsingh, Executive Director and Head — Private Equity Group, KPMG.

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