Investing in India has several important, nuanced aspects:

  • Sophisticated promoters, high-quality of intermediation and a slow-to-enforce banking sector reduces the likelihood of below-market entry or outsized returns.

  • A tough local operating environment, and a universe of extremely competent promoters highlights the significance of investing with high-quality, proven promoters as partners.

  • Companies face innumerable variables and “India-risks” which cannot be accurately forecasted. It is prudent to instead focus on transferring first-loss away.

  • In making a choice between traditional non-control, passive, private equity positions vs. investing to create/develop companies alongside global strategic and financial partners, the risk-to-reward ratio is skewed in favor of the latter.

© 2012, Acropolis