Private Equity - How to get your Businesses Ready
The Cochin Chamber of Commerce and Industry conducted the CEO Forum’s – 6th Breakfast Meeting on Friday, 7th June 2019 at Taj Gateway Hotel, Ernakulam.
Mr. V Venugopal, President of the Chamber delivered the Welcome Address and introduced the Speaker for the meeting, Mr. Vineet Satija, Director, Corporate Finance and Lead, Retail & Consumer – PwC. The topic for the Session was “Private Equity – How to get your Businesses Ready.”
Mr. Vineet Satija explained in detail the different financing options available for businesses today, benefits of raising capital from private equity, investment criteria for private equity and the process involved in raising private equity.
Equity Funding and Debt Funding are the two ways of funding a business. Equity financing comes in a wide range of forms, including Venture Capital, an Initial Public Offering, business loans, and private placement. The risk for equity is higher and as a result, the return expectation is also higher.
Mr. Satija spoke on the different factors for choosing the capital namely - the company profile, repayment ability, nature of the industry, and the risk appetite of the company. Most of the options available in the market today to raise capital are Private Equity, Venture Capital, Public Markets, and Debt Funds.
Mr. Satija explained that the important factor that differentiates between all of the above is the risk-return expectation. The return expectation for private equity is 20% per annum, for a venture capital it is 2 times the investment, for public markets it is 12% per annum, for debt fund it is 10-15% per annum, he added.
He also mentioned that the number of deals in private equity has been constant but the value of transactions increased over the years. The two sectors which attracted the maximum investment in private equity were technology and financial services.
Mr. Satija concluded by mentioning the factors to be considered before investing in a Private Equity namely Market Dynamics, Scalability of the Business, Corporate Governance and Financial Performance.
Mr. C S Kartha, Past President of the Chamber presented a Memento to Mr. Satija.
Mr. S P Kamath, Executive Committee Member proposed the Vote of Thanks.
The interactive session concluded by 10 a.m with Breakfast.