VIDEO: Tata Opportunities Fund's Mukund Rajan
PIPEs may be seen as a gray area for investors suspicious of the value-add private equity can provide to the asset class, but Mukund Rajan, managing director of the Tata Opportunities Fund, says PIPEs in India can make a difference – as long as they take a long-term view of the asset
Rajan, who is a keynote speaker at the AVCJ India Forum beginning today, makes the case that private equity can certainly provide the services to improve a publicly listed company's business over the long term, paralleling the role they play in unlisted companies, but this process takes time.
"Personally, I don't think you should be ideological about it. I don't think there's anything wrong per se with investments into listed companies, particularly in a market like India where the threshold for listings is actually quite low," Rajan tells AVCJ TV. "You do have many situations where companies are listed and yet promoters may find it difficult to access further capital from public markets, so they go back to private equity and receive the support private equity can really offer."
Rajan additionally notes that overseas funds should be particularly wary of the corporate governance issues that can arise in Indian companies, advising that it's only through experience in the market that investors begin to understand the types of promoters and business partners to seek out.
Read more on AVCJ's India Forum 2011, held December 1 & 2 at the JW Marriott Mumbai, at http://www.avcjindia.com/, and follow live Twitter updates at @AVCJ (hashtag #avcj and #avcjindia).
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