Sunday, August 06, 2006

The Great Indian gold rush and the Great Wealth Transfer

The latest issue of Business World talks about the great private equity deluge in India. The last time anything remotely similar happened was in 2000. Interestingly, the PE/VC funds are investing in all kinds of companies these days - Hi-tech, low-tech,no-tech, stock broking companies with world class research (ha ha , which world are these guys from), hotels, and what have you.
Good time to be a promoter really. With too much money sloshing around and people hungry to do deals, the entreprenuers have never had it so good.
Looks like the whole of India is one big opportunity and everyone is confident about 30% IRR for the foreseeable future. Even more interesting are the PE investments in infrastructure companies. India needs tons of money to upgrade her infrastrucutre and it is really lucky that we got all these PE/VC friends throwing money around. The U.S got built with investments from England/Scotland and to a lesser extent Europe and these investments turned out to be one way wealth transfers with the investors getting nothing in return. Another wealth transfer from American Banks helped to upgrade the infrastructure in Latin America. Now it is India's turn. Are we lucky or wot?
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