What are Private Equity Funds?
Private Equity funds acquire significant or controlling stakes in established, profitable businesses with the goal of operational improvement and value creation before exit. India's PE market deployed over $30 billion in 2023, making it one of Asia's most active PE destinations.
- Control Premium: PE funds often hold 51%+ or significant minority stakes
- Operational Value Add: Active board roles, management hiring, and strategy input
- Leverage Efficient: Some funds use moderate leverage to enhance equity returns
- Proven Track Record: Target companies with ₹100Cr+ revenues and profitability
- Multiple Exit Options: IPO, strategic sale, or PE-to-PE secondary transactions
PE Investment Process
The private equity investment lifecycle typically spans 4–7 years:
- Proprietary deal sourcing through sector specialists and banking relationships
- Detailed due diligence: financial, legal, operational, and market assessment
- Investment Committee approval and term sheet negotiation
- Post-investment: 100-day plan execution and board participation
- Exit preparation: IPO filing, investment banker mandating, or strategic M&A process