IPO gloom = PE boom?

Dark clouds have gathered over the primary markets and as the saying goes, the silver lining is there for anyone interested in seeing it. Companies, which see the IPO route as being treacherous at the moment, are moving towards the PE route to raise funds. And all indications point to an exciting deal pipeline in 2012.

Dalip Pathak, managing director of Warburg Pincus feels the potential for this industry is vast and has not as yet been fully realized as there is a fair amount of policy uncertainty in many sectors, including sectoral caps, which inhibit investors from putting in money.

According to Vishakha Mulye, MD & CEO at ICICI Venture, India is still growing and the consumption story is intact. 'We see a good deal flow coming, in fact, market not being so good is good for the PE because the people who are planning to raise money by going to public markets, are typically now relying on the PE money.'  

However, policy issues may throw a spanner in the works.

Rahul Bhasin managing partner, Baring PE said, 'Policy framework is a serious issue because when we try to put our governance structures together, we actually ape the West. We try and copy lot of the elements of the American legislation.'

However, Mahesh Chhabria Partner, Actis said, "As long as the process can be shortened from a perspective of taking companies public, from the time that you're start the process to the time you get listed, if one can actually work on that, I think it will be a welcome change."

PE players say infrastructure is the hottest sector with financial services and consumer goods next in line... and start ups and small and medium enterprises coming in a close third.