Private equity in India in

Abstract

Private Equity is a form of risk capital provided generally to,but is not limited to, start-ups and SMEs. Private Equity investments can range from capital to start-ups to purchase of large mature quoted companies. However PE activity in listed companies is not common in India. Private Equity transactions involves two main participants- a PE fund manager and company’s shareholders & its management. Private Equity investments are different from investments in equity through stock markets because PE transactions usually align the interests of management and shareholders tightly to counter PrincipalAgent Problem and achieve economic efficiencies. Private Equity Industry (or Market) has two distinct players: 1. Venture Capitalists: targeting start-ups and early stage companies. 2. Private Equity Players: providing capital tomature businesses for development or buy-outs.