Indian investors should step up their game and take long-term risks to identify and nurture new age differentiated businesses to create a new set of champion entrepreneurs, Vishal Mahadevia, the Indian head of US-based private equity firm Warburg Pincus, said in a special address at the VCCircle’s LP Summit 2022 on Friday.
During his speech, Mahadevia underscored how Indian investors can find value in the Indian startup ecosystem, especially when India’s economy showed a great resilience after second wave of pandemic and heading towards normalcy.
Mahadevia, who has been spearheading New York-headquartered fund’s local operations for past 15 years, stressed on backing new businesses which ultimately can give birth to new sectors itself. “Risks need to be taken to invest in disruptions and stay focus on formidable businesses which can survive scenarios like covid,” he said.
He believes asset managers should track assets well ahead of auction process and once onboarded they should work towards strengthening of the management and share their expertises in terms of expansion and important decision making processes. "They should screen credible CEO candidates, offer advices in terms of revenue optimization and geographical expansion. They should also bring expertises to businesses in terms of global network access, supply chain and technology upgradation,” he said.
Limited Partners of funds operating in India have always expressed reservations that returns have not kept pace with higher volume of investments. However, the year 2021 bucked the trend. “Over $63 billion were invested across over 1200 investments across sectors last year. However, heartening was to see both volume and number of exits, nearly $40 billion were returned to LPs,” Mahadevia pointed out.
He lauded the birth of record number of unicorns last year. “In last one decade 37 unicorns were born and prior to 2018 just 1 or 2 unicorns had emerged. Last year there were 44 unicorns,” he said.
Referring to heightened capital market activity last year, the veteran private equity professional said that around 60 companies raised $16 billion from their debut on bourses. “Some of the stellar IPOs were that of Nykaa, Zomato, Paytm and CarTrade,” he added.
The investor also pointed out that pandemic has also made ways to new phenomenon like online discount broking and cryptocurrency, besides inclination towards much more digital payments. Indicating maturity of the economy despite staggered lockdowns crippling businesses in 2020, the buffet indicator was at all time high last year, he said.
