Centre plans regulatory framework for private equity investments

The Centre is working on a new regulatory framework for private equity investments into the country.

“We want to start and do it from a clean slate. Discussions are on with SEBI. We expect to achieve some tangible results in a month or two,” a Finance Ministry official said.

Private equity investments are expected to be buoyant this year. Volatile stock markets are forcing companies to look at avenues other than public markets for their capital raising.

However, sluggish stock markets are affecting exits for many private equity investors.

Sector strength

India could see private equity investments of about $10 billion in 2011, higher than the $6 billion levels seen last year, according to industry watchers.

The sectors where private equity activity has remained strong include retail, infrastructure and technology.

The private equity environment in India had fundamentally changed after the global financial crisis in September 2008. Deal volumes and investment size have been severely impacted.

But now more investors are returning to the market, indicating that things may not be all that bad this year.