<div><em>Some of the companies that hit the capital market this year and paved the way for exits for investors include ING Vysya Bank and Bharti Infratel. <strong>Paramita Chatterjee</strong> reports</em><br><br><br>Owing to rupee devaluation over the last few months, private equity investors say they may have to opt for the IPO route over strategic sales for cashing out profitably from their portfolio companies.</div><div> </div><div>This comes at a time when private equity investors were beginning to breathe easy with the exit scenario showing clear signs of improvement - both in terms of strategic sales and IPOs after years of slow exits.</div><div> </div><div>So far this calendar year, in the January – August period, as many as 160 exits have taken place where private equity firms have encashed $6,731 million, as per data available with research firm Venture Intelligence. This is the highest in the last 5 years. In the corresponding period in 2014 (January-August period), only 115 exits were sealed worth $2,125 million. In the entire calendar year of 2014, the total number of exits went up to 192 where PE firms made $3,887 million.</div><div> </div><div>This is clearly good news for the industry which struggling for successful exits over the past few years. “Returns for private equity has dropped from 40-50 per cent in 2005-08 to 10 per cent in the last two years and holding period has risen to 6 years from 3 years earlier,” said Bijou Kurien, Member, Strategic Advisory Board and Mentor, L Capital Asia (LVMH Group) in the recently-held India Retail Forum 2015 in Mumbai. “There is some stress for private equity in generating returns due to rapidly depreciating rupee along with competition leading to higher valuations,” he added.</div><div> </div><div>A single PE investment cycle usually lasts 5-7 years after which PE firms normally exit by way of trade sale, public listing, recapitalisation and secondary sale. Trade sale is the most common exit for private equity investments as trade buyers in the same industry are often more likely to realise synergies with the business and are therefore, the most natural buyers of the business. Typically, public listing takes place during positive market conditions as prevailing at present.</div><div> </div><div>Of all the exits that have taken place in the last 8 months of this calendar year, as many as 36 can be classified as strategic sales, 17 as secondary sales and 10 buybacks. The highest of exits were through public market sales, the number standing at 97.</div><div> </div><div>Some of the companies that hit the capital market this year and paved the way for exits for investors include ING Vysya Bank and Bharti Infratel.</div><div> </div>
