FROM THE C-SUITE

CMD, TVS Capital Funds

This has truly been a break-through budget for the PE/VC industry.  Tax pass-through for all Category I and Category II funds, and the ability to blend foreign capital in AIFs, will provide significantly greater access to funds. This could propel the PE/VC industry from making annual deployment of $8-9 billion to a trajectory of making three times the current annual deployment ($25–30 billion) in the next 3 years. Unlisted companies, who face the most scarcity of Capital, are the primary recipients of VC/PE equity.  Two budget measures that will greatly accelerate the availability of debt capital to unlisted mid-sized companies are: (1) enabling NBFCs (mid-sized) with SARFAESI Act and (2) MSME refinancing mechanism through the Mudra Bank. These measures give greater protection to the lending NBFCs, and hence enhance their ability to lend particularly at the growth stages of companies.   These measures will also create an enabling environment for growth and entrepreneurship, providing ubiquitous equity and debt capital for all capable entrepreneurs! The clarifications on permanent establishments regarding India-focused offshore fund managers in India is a good initial platform to enable offshore fund managers to operate from India.  While it is a good beginning, it appears to need some work from the government to iron out the execution details. The PE / VC industry has worked with the government for these changes, for 3 years.  It has paid off, thanks to a government that listens and thinks big!

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