In a guest article on FE, Klass Oskam, VP E&Y, discusses the reasons behind the VC and Private Equity boom in India.
What is driving this PE/VC investment boom? The most important fact is Indian GDP growth coming within striking range of double-digits. Annual growth rates of 7-9% are unheard of in mature western economies, and global investors want high returns. Furthermore, several key sectors of the Indian economy (IT/BPO, telecom, pharma/healthcare, financial services, retail and automotive components) that are investment targets are experiencing even higher growth than the said levels (of 7-9%). Other key attractions include: an economy well positioned to mine the opportunities of globalisation, an increased appetite for innovation and entrepreneurship, well-regulated and fully functional capital markets and a spurt in consumerism powered by the young demographic profile.
He also expresses concerns about recently introduced government regulations on the issue of FBT on stock options and compliance related to preference shares.
Read the entire article here.
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