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‘Long-term vision must for choosing fund’

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FUNDING GROWTH: Suresh Raju, Executive Director of TVS Capital Funds (second left), speaking at a panel discussion organised by the Confederation of Indian Industry in Coimbatore on Tuesday.
FUNDING GROWTH: Suresh Raju, Executive Director of TVS Capital Funds (second left), speaking at a panel discussion organised by the Confederation of Indian Industry in Coimbatore on Tuesday.

Staff Reporter

Confederation of Indian Industry organises interactive session

COIMBATORE: Private equity was growth-oriented and a long-term vision was essential while choosing the fund, according to Suresh Raju, Executive Director of TVS Capital Funds.

Companies that go in for private equity funding should choose the fund that would fit with the company’s culture, he suggested.

Opportunities

At an interactive session organised by the Confederation of Indian Industry (CII) here on Tuesday, he said that private equity was in an interesting and early phase in the country. It had a number of opportunities in emerging and tier-two cities where organic growth was happening.

Arun Uday, Senior Manager of HSBC Private Equity Advisors (India), said that awareness was growing in the country about private equity funds and it was a new source of capital to tap into. He also gave details about HSBC’s private equity funds.

K. Narayanan, Company Secretary of Anugraha Valve Castings, said that several unlisted companies here had 20 to 30 per cent private equity share. They went in for these funds since the industries were in need of expansion and funds at small level. There were three types of investors: financial, strategic and promoters.

In conventional financing, the cost of fund was higher. In the case of private equity funding, the investors were aware of the risks and returns and investment was based on the company’s performance.

Puneet Chaddha, who heads commercial banking at the HSBC (India), said the bank recognised the need for a product sweep that met the needs of all customers and companies.

Companies changed their requirements as they developed. The bank had expanded to smaller cities. There was also a need to share information with customers.

Important role

Chairman of the CII, Coimbatore Zone, C.N. Ashok, said that private equity played an important role in the development of the SME space in the country. Currently, there were more than 366 private equity/venture capital firms operating in the country. These firms would amass $ 48 billion earmarked for investment in India between July 2007 and December 2010. In Coimbatore, however, only a handful of companies had realised the potential of private equity funding, he said.

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