The Dickenson Intellinetics “Venture Capital and Private Equity Guide for India 2004-05 (the Guide)” is a timely release with the Indian economy at an inflection point. A phase of accelerated expansion supported by strong fundamentals, stable monetary environment and a structural shift in the economy provides fresh opportunities for private investments.

The Private Equity (PE)/Venture Capital (VC) industry in India has grown over the last decade with over US$ 5 bn being committed for investments. Activity in the first half of 2004 has witnessed an upsurge, with investments aggregating Rs 26.5 billion ($589 million) as compared to Rs 33.2 billion ($738 million) in CY2003. Continuing profitability, an enabling regulatory framework (with the modified SEBI Venture Capital Guidelines and Indian Companies Act) and improved investment climate have contributed towards making India an attractive private equity destination. Significantly, India is the 3rd largest receiver of private equity in Asia after Japan and Korea. In addition, India is one of the few emerging markets where PE/VC Funds have been successful in achieving profitable exits from their investments through a combination of IPOs, Strategic Sales and Promoter Buy-backs.

The increasing quantum of private equity investments highlights the importance of private equity as a source of growth for companies/entrepreneurs looking to expand.

In this context, I am pleased that the Guide has profiled PE/VC firms in detail, which will prove to be of immense use to both Entrepreneurs and the PE/VC community. While attempting to raise capital from PE/VC Funds, it is important for companies/entrepreneurs to evaluate the “fit” between the Fund and the company i.e. whether an investment in the company is in line with the PE/VC's investment strategy. Accordingly, it gives me great pleasure to note that the Guide includes Selector tables, which profile PE/VC Funds in terms of sector preferences, deal size and stage of investment.

This will go a long way in helping companies/entrepreneurs devise a strategy on approaching only relevant PE/VCs, thereby saving both time and effort. Besides this, the Guide's coverage of the extant SEBI Regulations and various terms used in the industry should prove to be of use to entrepreneurs during the fund-raising process.

From an industry perspective, this Guide will enable PE/VC Fund Management companies network better thereby opening up partnering opportunities as well as enabling peer group comparison. It should also prove to be a useful source for international PE/VC Funds while formulating an entry strategy into the Indian markets.

I wish Dickenson Intellinetics all the very best for the Venture Capital and Private Equity Guide for India 2004-05.