Private equity funds investing in the Indian market could soon come under the regulator's purview. Sebi is believed to be toying with the idea of having rules for such funds, reports CNBC-TV18.
USD 7.5 billion – that's the money that came into India through the private equity route last year alone. It's a path that many international and domestic investors have chosen over the past few years and quite lucratively so. With many investors opting to go the private equity way, market regulator Sebi is exploring the possibility of regulations for private equity funds.
“It's still a grey area – whether they are supposed to be regulated or not regulated. The mutual fund regulations will be looking at it,” says Usha Narayanan, Executive Director, Sebi
Recently private equity funds came under the government's scanner when a foreign private equity fund bought controlling stake in an Indian company, through the private equity route. The change in shareholding led to a change in control but no open offer was made.
That's when Sebi stepped in and sought clarification from the government on the application of takeover norms for these investors. An open offer followed but no definite regulations or guidelines were in place. It's perhaps loopholes like this that Sebi maybe looking to plug.
Source : MoneyControl