The private equity (PE) industry is likely to witness a slowdown by as much as 50% by 2010, say industry experts. After riding on a boom and witnessing stupendous growth year-on-year, PE players such as Baring Private Equity Partners, ChrysCapital, India Value Fund Advisors and Kotak Private Equity Group among others have indicated that they will soon take a conservative approach towards investments.
According to Baring, PE firms are overexposed in India. While valuations on the country’s share market have more than quadrupled over the last five years, corrections too are slated to happen.
“After fuelling a boom, PE investments will witness a slowdown. India will see half the number of investments in the next couple of years,” Baring Private Equity Partners (India) managing partner Rahul Bhasin told ET.
According to industry experts, export-oriented sectors such as IT and ITeS and real estate will witness lesser number of deals in the next two years. Also, the global slowdown will have some impact on the economic growth in India and that in turn could impact the demand for growth capital.