Indian government's Department of Industrial Policy and Promotion (DIPP) is likely to start tracking the duration of investment, entry and exit patterns of private equity in India, the Economic Times reported, quoting unnamed sources.
It however quoted a DIPP source as saying it will not resort to regulatory measures as this could send a wrong signal to investors.
Many foreign private equity funds take over company managements rather than staying as only financial investors, with 10-15 pct stake, and the government will monitor the outcome of such management takeovers on the health of the company, the daily added.
SEBI had earlier said overseas funds picking up controlling stake in listed Indian firms through the secondary market can lead to asset stripping as identities of many of the foreign investors involved with such funds are not disclosed and the ultimate source of funds is not verifiable, the paper noted.
Private equity deals announced in 2007 amounted to 19.03 bln usd, of which Temasek accounted for 2.5 bln usd, the paper said. As many as 386 private equity deals were struck last year with major funds including Temasek, GIC, Blackstone Group , Warburg Pincus, Carlyle Group and Actis Capital the paper said.(Forbes)