New Delhi: US-based Bessemer Capital has invested $50 million in India over the past year.
Although the firm hopes to maintain or even accelerate its pace of investment in India, the bull run has reduced the number of stocks it can buy at a suitable price.
Bessemer has just concluded two deals - a Rs 100-crore deal in a South Indian company and Rs 125-crore deal for 9.29 per cent in Motilal Oswal along with New Vernon.
Anand Sridharan of Bessemer Capital says, "It's harder to find companies at the right kind of price, but it's still not impossible. You can still find companies like Motilal Oswal at the right kind of price to invest in."
Large funds like New Vernon, which have a $900 million exposure in India, believe stocks could be over-valued.
Rajiv Sahney of New Vernon Capital says, "The key challenge is to find companies where earnings will grow fast enough so that what looks like an expensive valuation today does not look so expensive a couple of years down the line."
Meanwhile, even unlisted companies look unreasonably priced because their stakes are valued in line with listed businesses in the same industry.
So now, for the first time, foreign private equity firms have begun to look at 'early stage' financing for Indian companies in the hope of acquiring stake at right valuations.
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