Private Equity Backed Companies Growing Faster in India: Study

Private equity and venture capital backed companies in India have recorded faster sales growth and higher wages than non PE-backed listed firms, according to a study by Venture Intelligence. 

In 2006, PE firms have invested $7.5 billion in 299 deals in India, three times the amount of 2005.

Study Highlights:

  • Sales at publicly listed PE-backed companies grew by 22.9% over a five-year period to 2005, compared with 10% at listed firms which do not have PE backing and 15.8% at Nifty Index companies
  • Wages at publicly listed PE-backed companies grew by 32% over the five-year period, compared with 6% at non PE-backed listed firms and 16% at Nifty Index companies.
  • More than 60% of top executives at PE-backed companies surveyed said the number of employees at their firms rose after PE investment, the survey said.

"Private equity (and) venture capital investment, when chosen and leveraged well, can help Indian companies ... in several ways that add significant value to the Indian economy," said Arun Natarajan, founder and chief executive of research firm Venture Intelligence, which compiled the study.

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