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Private Equity: Few takers for non ecommerce businesses
Jun 19, 2015


With announcement of more and more money being raised by companies in the e-commerce space, their valuations have only being going through the roof over time. And with this development, many have termed the present times as the "e-com bubble" . And the term seems quite apt as similar sentiments do not seem to be shared in the private equity (PE) deals in the non-ecommerce and Internet space.

As reported by the Mint, research firm Venture Intelligence's data indicates that Indian companies have raised a mere US$ 465 m of growth capital in 2015 so far. This chart of the day shows the trend in the growth capital fund raising activity over the past few years (barring e-commerce and Internet deals).

It may be noted that the data is very much comparable as the period of comparison in each year is from the month of January to June.

The uncertainty and economic slowdown seem to be the key reasons for the dullness in PE activity mentioned above. The sentiments in the traded stocks pretty much indicate the same given that the markets have seen a good amount of pull back in the year till date.

Well, what can retail investors take away from this? For one, it's the fact that sentiments are dull and outlook is uncertain. But that's it! As compared to the PE firms, retail investors do not have a limited investment horizon. That puts them at a huge advantage as compared to the PE guys, if one was to ask us.

Data source: Mint , Venture Intelligence

This Chart Of The Day was published in The 5 Minute WrapUp - The 'Selling policy' for big returns in little known stocks

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