Trends and Patterns in Venture Capital/Private Equity in India: A Review

Abstract

Venture capital investment has been increasing in India in recent times due to its strong potential, an improving regulatory environment and favourable demographics. This paper examines the trends and patterns of venture capital companies’ investment in India and the evolving regulatory framework permitting higher investment limits. The trends in venture capital investment are not only in the direction of exploiting IT/ITES sector, but also in infrastructure, retail, manufacturing and financial service sector. The policy framework has been gradually liberalized in the reactive mode rather than a proactive measure to help venture capital companies to increase their portfolio investment. The paper concludes that venture capital can fuel the economy, and the recent amendments and regulatory changes may encourage venture capitalist to invest more effectively in India and make Indian venture capital industry vibrant.