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Private equity can be a catalysing agent for funding future Indian champions, says Warburg Pincus' Charles Kaye

Updated : August 29, 2020 03:19 PM IST

Marquee global giant Warburg Pincus' co-chief executive officer Charles Kaye said he sees a big role being played by the private equity industry in fuelling the growth of the future champions in India.

In an interview to CNBC-TV18's Nisha Poddar, Kaye said, "Risk capital along with the value adding expertise provided by the investor as a partner can go for a long way in backing the new emerging companies of the future."

"Core of the India story has always been the domestic demand and that creates a powerful tailwind...the ability to leapfrog in the technology sense presents a remarkable opportunity in India," said Kaye talking about finding opportunity in the present crisis.

In terms of particular opportunities Charles said, "India's place in the global supply chain with it’s natural advantages are quite compelling. Investors have been looking for predictability and ease of doing business in India."

Kays points out that certainly government sees it, Startup India, self-reliant India and dimensions of creating that opportunity in India.

In 2019, we saw a record PE/VC investments of $48 billion. Buyouts in India grew by 56 percent to notch up over $16 billion last year. 58 buyout deals in 2019 has been the largest increase ever.

While buyouts by private equity firms are increasingly becoming a trend and is likely to continue, Warburg Pincus is of the view that private equity has a bigger role to play perhaps as a control player but without the dimension of the control that are seen in generational firms.

Global investors can provide vast resources in terms of expertise, connect and also governance standards as ESG or Environment, Social & Governance aspects are gaining more prominence in assessing and valuing a company.
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