The Finance Society of Faculty of Management Studies, Delhi organized the conclave 2008 on the theme “Private Equity Symposium” on 20th September, 2008.The conclave was held at ITC Sheraton.

The daylong session witnessed the esteemed people from industry and the government. The Key note address was given by Mr Gopal Nair, Director, Capital Markets, Ministry of Finance. He defined the role of the regulator in these challenging times should be that of an innovator. One should respond to the crisis in a well planned manner. He said that India has had a relatively limited impact of the turmoil affecting rest of the world as we have adopted a policy of moving slowly and steadily. He mentioned about the changes in financial sectors being gradual. He pointed out that the regulators needed to look into market stability, CSR initiatives and financial inclusion.

This was followed by a discussion on “Private Equity: The Road ahead for Brand India”. The panel comprised of Mr Randhir Kochhar,Director,DE Shaw India Advisory Private Limited,Mr Sanjeev Krishan,Executive Director,PwC,Mr Sandeep Malhotra,Senior Director,ICICI Ventures,Mr Pinaki Bhattacharyya,Principal,IDFC Private Equity ,Mr Ajay Kapur,CEO, SIDBI Venture and Mr Shailesh Singh ,Director,2i Capital.

The panel started the discussion with the topic of global slowdown which has moved towards the meltdown during the last week. Its impact on Indian PE industry was clearly visible. The PE investments has risen from 8 billion in 2006 to 18 billion in 2007, but in the present year the figure has been around 6 billion till date.

The fundamentals of Indian Economy were discussed and were pointed out to be sound. The growth of sensex from level of 5,000 to 20,000 in a very short time was pointed out as a reason for the defocusing of PE firms. The level of valuation was unrealistic. The meltdown is an indication of things getting more realistic. It is a good time for new investors and companies to enter the market.
Three major challenges for PE firms were identified as the cash crunch, shortage of skilled people and delays in profit bookings. The number of PEs has shot up from 70-80 three years back to 300 now. This has led to a talent crunch.

The raising interest rates will make it difficult for the PEs to get funds. This will lead to need to select the investment opportunities after greater scrutiny. This will in turn require the industries to employee better corporate governance, whereby they will need to be more transparent.
The panel pointed out that PE needs to focus more upon Small Scale Enterprises.These industries have PE as the major viable source of Fund. It will be profitable to invest in them due to their nimbleness.

Answering the question about the exit strategy, the panel pointed out the best policy for the PEs would be to wait and let the market improve. In case the firms have got majority stakes, Buy out would be a good option.

The conclave continued post lunch on the discussion “Growing Chase for the right Buyer”. The panel consisted of Mr Rahul Surana,MD,Standard Charted PE Advisory,Mr Ravi Shankar P,Director,Global Market,Deustsche Bank,Mr Ajay Tondon,Director Citi Venture,Mr Amit Khurana,Head Equities Collins,Mr Sunil Godwani,CEO and MD Religare Enterprise Ltd,Mr Siddhartha Nigam VP & North Regional Head-I Banking, Edelweiss Capital and Mr Tarun Khanna,Director,I Banking, Yes bank.
The speakers from diverse backgrounds were able give the difference in perspective of PE for the major stakeholders.