Topic:Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
4) What are Private equity funds? Trace the growth of PE Funds in India. List down the advantages and disadvantages of the same.(250 words)
Why this question:
The news of Café Coffee Day founder V.G. Siddhartha’s disappearance has brought into focus the role of private equity (PE) investors in shaping the startup culture in India.
Key demand of the question:
The answer must evaluate the concept of private equity funds and trace the growth of PE funds and the advantages and disadvantages.
Structure of the answer:
Define what are PE funds.
Equity capital that is not quoted on a public exchange is Private Equity. Private equity funds are investment companies that, as a rule, do not hold publicly-traded securities but seek the equity stakes in private companies.
Then discuss the Growth of PE Funds in India.
PE investors have been enticed by India’s growing status as an economic powerhouse, its strong entrepreneurial spirit.
Discuss their advantages and disadvantages.
Conclude with way forward, suggest upon the importance of PE funds and need for their regulatory mechanism.