India attracts high Private Equity cash flows in 2016!
2016 saw a great surge in private equity investment in India. A changed regulatory framework, and the passage of RERA (Real Estate Regulatory Act) and GST (Goods and Services Tax) Acts have largely contributed to the positive change that the Indian investment market has witnessed.
38,000 crore worth of Private Equity investments made it the second best year for investments after 2007.
The total cash inflow in 2016 was 38,000 crore as against 23,500 crore in 2015, marking a massive 62% increase. While 13,500 crore, of the 38,000 crore, was via pure equity, the rest was through different structures of debt. Equity investments, as standalone, grew by 29%!
As per one report, most PE investments happened in the second half of the year. While 21,000 crore were pumped into realty in 2015, the second half of 2016, saw an investment of 23,500 crore; raising the investments by 121% recorded in the same time period in the previous year.
With RERA and GST coming into the picture, faith has been restored in India’s reputation as a growing economy. The Real Estate Bill promotes transparency, accountability, and efficiency, thus protecting the interests of buyers.
The GST, on the other hand, will make it easier to do business by levying a single tax, promoting uniformity and easing the process of doing business in the world’s seventh-largest economy.
All in all, the proactive initiatives taken by the Modi Government have had a positive impact on the social and economic conditions of the economy, winning the confidence of investors, and making India one of the most lucrative markets for investments.
With 2016 closing as a fantastic year for realty investments, all eyes are on 2017 to take this upward swing higher!