>Enabling Growth in Promising Indian Companies (KPMG)

Background: India has a very vibrant Venture Capital (VC) / Private Equity (PE) industry with USD 32.5 billion invested across more than 1500 VC/PE deals from January 2006 till date.
It is estimated that currently there are over 137 domestic and 135 foreign PE fund managers in India.

Over the last three years, VC/PE investments were the equivalent of 33 percent to 72 percent of the total equity raised from primary markets.

Importance of VC/PE investments for Indian companies
Economists estimate that India needs about USD 1.3 trillion dollars of investment over the next three years to sustain a GDP growth of 7-9 percent. This translates to USD 60-100 billion of VC/PE investments requirement over three years, against which industry estimates that PE investments would be in the range of USD 9-10 billion in the year ending December 31, 2010.

A study conducted in 2009 by Venture Intelligence on the impact of PE in India assessed how PE-funded companies have performed vis-à-vis non-PE funded companies in the same industry over eight years from 2000-2008. The study found that PE boosts the Indian economy by creating value for corporate India. This is through higher growth in sales and profitability of PE-funded companies; higher R&D spends which fuels greater innovation, and higher wage payment as compared to non PE funded companies.

To read the full report: INDIAN COMPANIES