Financial globalization and increasing risk appetite among global investors has given birth to a new genre of financial intermediaries such as the private equity (PE). private equity industry has emerged as a potential source of capital for the corporate sector. They have been facilitating the productive use of existing assets and resources, usually by identifying companies with untapped potential and reorganizing their operations in ways that increase their value. Over the years, they have made their presence felt in the Indian economy too. Growth in savings, abundant liquidity propelled by petrodollars, sovereign wealth funds as well as hedge funds and an accommodative monetary policy that enabled a low interest rate environment accelerated this process further. Moreover, regulatory changes such as pension fund reforms and financial innovations like securitization motivated the growth of alternative asset classes like private equity and more particularly, the leveraged buyout industry since 2000.

In the last decade, private equity in India was over-estimated, and now it is undeserved, as quoted by McKinsey. It turned out that the Indian market has fewer private companies than other emerging markets (BRICS). India has 2600 public listed companies with $125 million in revenue whereas in China, there are only 1000. So, many private firms went public even before private equity firms in India ever reached them. Moreover, India’s GDP has started to decline after 2011.

But things are not as dull as they seem on the surface.

According to McKinsey’s research, private equity backed companies in India have improved their revenues and earned profits faster than public companies. That means that private equity in India has become a crucial capital source for Indian companies. This edition is highlighting the most promising private equity service providers of the present and future. We certainly hope these firms can recognize your idea and for what it's worth.