Infrastructure, pharmaceuticals and education present attractive opportunities for private equity investment. Yashojit Mitra and Archana Khosla of Economic Laws Practice explain why
A few years ago, Indian real estate was the preferred investment sector of the private equity industry. But with the passing of time, bricks and mortar lost some of their allure as new sectors began vying for investors’ attention. Of the sectors that have risen to prominence, infrastructure, pharmaceuticals and education are among the most significant.
Infrastructure
Without doubt there are huge opportunities in India’s infrastructure sector, as well as in its ancillary industries such as construction, engineering, steel and cement. The country has recognized the important role that private equity can play in the development of its public infrastructure. As a result, foreign direct investment of up to 100% is permitted under the automatic route.
Challenges such as delays in execution, regulatory hurdles, slow clearances and problematic land acquisitions continue to frustrate investors, yet the realization that India’s growth must be underpinned by a fundamental metamorphosis of its infrastructure gives investors much confidence. Power, roads, railways, ports, airports and other urban and rural infrastructure projects are therefore generating significant interest.
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Yashojit Mitra is an associate partner and Archana Khosla is an associate with Economic Laws Practice (ELP). The authors can be contacted at privateequity@elp-in.com. Please note that the opinions expressed herein are personal and are not necessarily the opinions of ELP. The information provided about recent transactions has been collated from publicly available sources.
