Lawyers in India expect slow development of traditional
private equity models in the domestic market.
Speaking at IFLR’s India Outbound Investment
Forum yesterday, Blackstone India’s senior
managing director and chairman, Akhil Gupta said regulatory
restrictions on debt raising in India and cultural hurdles had
hindered take-up for highly-leveraged M&A deals, such as
leveraged buy outs (LBOs).
A preference among promoters for a diversified business
portfolio rather than a focused business approach had also had
an impact, he said.
DSP Merril Lynch’s managing director and
investment banking vice chairman, Bala Swaminathan said LBO
deals were difficult to execute in the Indian market due to a
lack of available bank credit. The scarcity of automated
business processes also made it challenging for new owners to
run complex business processes.
LBO situations are a viable option for high-tech target
companies in which it is relatively easy for new