How to go about private equity investing in India

Are you an investor looking to invest in companies / businesses through private equity? Want to know about professionals who can help you analyse a company in which you are raising private equity funds? Well, you have arrived at the right place – we, at ProBizAdvisor, help companies to find the right kind of private equity funding, and thereby, even help investors to find the right companies where they can invest in equity mode and realize significant profits. With us, you do not have to worry about the time frame of investment, or about ways to safeguard the investor’s interest. To help you make things easier, we present this step-by-step guide for private equity investing in India.

Step 1 – Finding the industry Before jumping upon the selection of a company for private equity investment, you need to search for the most ideal industry with potential to give back the highest rate of return as well as growth.

Step 2 – Get thorough analysis of the business and its future The demand for the products / services that the business indulges in, along with the experience of the management, tracking of past profitability reports, future finance potential and business expansion plans, etc. are also taken into consideration. A professional firm like ProBizAdvisor can help you with the SWOT (Strength, Weakness, Opportunities, and Threats) analysis study before you can make an investment decision.

Step 3 – Carry out a detailed-study of RBI guidelines You need to be aware of all the RBI circulars with regards to private equity investments or funding, as RBI guidelines are mandatory to be followed. You can consult a finance advisory firm to get updated information on the same.

Step 4 – Preparing the Shareholders Agreement The most important document in the whole procedure of private equity fund raising is the shareholders agreement to protect the interest of the shareholders. You can take your time to prepare this agreement and negotiate multiple times. After all, the legal terms & conditions, the process to be followed, the exit formalities, etc. have to be listed in complete detail. Professional help will be required the most for this step in the private equity investing process.

Step 5 – Get management control over business You cannot be aware of the operational activities and decisions made by the board of directors, without taking control of the management of the company you have decided to invest in. You can achieve this task by appointing a nominee director on the company’s board.

Step 6 – Selling stake to market or promoters After the private equity process is followed and the investment is done in your choice of company, and once the business expands over a time period pre-fixed by you at the start, you can determine the technique to start realizing profits from your private equity investment. You can decide to go the IPO (Initial Public Offering) way by selling the stake in the open market, a highly probable option. Alternatively, you can choose to sell the shares back to the promoters.

As seen in the above listed process to opt for private equity investing in India, you (the investor) as well as the company (in which you are investing) requires a professional finance advisory firm like ProBizAdvisor to help them out.