In addition, private equity’s record is checkered when viewed from the perspective of providers of capital. Of the $51 billion invested up to 2008, only $16 billion was able to be extracted by January 2014—and the multiple of 1.7x is far below expectations. One could argue it’s because of a host of underlying causes, ranging from the global financial downturn to the devaluation of Indian rupee. Yet the impact on investors is undeniable: they paid high entry prices to make investments and found exit routes restricted.
Overall, though, our study gave us optimism. It’s clear that private equity as an asset class has had a significant impact on investee companies in India as well as the underlying economy. And while we know there’s room to improve eventual returns, private equity could play a big role in powering the Indian economy in the months and years to come.