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Abstract
A tremendous growth has been observed in the private equity (PE) market in India in the last decade. The landscape of PE investments in India is basically dominated by three important stages namely, early stage, late stage and private investment in public equity (PIPEs) with "growth stage" and "PIPEs" surfacing as frontrunners in PE investments. Given the escalating interest of investors in Indian equity market, the paper is based on the impression that PIPE transactions are set to become its next big instrument of investments. Accordingly, this paper synthesizes the information on PIPE market in India by deliberating on numerous aspects of PIPE and its features. The objective was to identify various opportunities for investments by analyzing the past trend of investments made by the major PE investors during the last few years. The paper also examines the challenge faced by investors in India while executing these types of transactions. Furthermore, the deal analysis was undertaken investigating the PIPE transactions in India for 2008-2013. In the analysis, key stages of PE investments namely, early stage, growth stage, and late stage were isolated along with the determination of key sectors where the investors were investing currently during specific study-period. Some of the sectors which were examined were of IT & ITES, healthcare, e-commerce, renewable energy etc. The analysis found certain sectors to attract more PIPE investments in future whereas other factors were identified to be stifling the PIPE deals in India, presently. The analysis also found a meaningful decline in the investment activity during the financial crisis of 2008-2009 and impressive recovery in post-crisis period. Finally, given the exploratory nature of the paper, further research can be carried out that corroborates the findings of this paper by engaging in the confirmatory studies.
Keywords
Private Equity (PE), Private Investment in Public Equity (PIPEs), Financial Crisis, Venture Capital Firms, India
Introduction
A tremendous growth has been observed in the private equity (PE) market in India in the last decade. The peculiar characteristic of Indian economy of being consumption driven makes it a favourable investment destination among the investors globally. Even the survey by a major consultancy firm Ernst & Young (EY), regard India as an attractive destination for investors. India is witnessing heightened interest of global...