Private equity investment—what all you need to keep in mind?
Even those who are working in real estate
business market for long time, find it hard to understand private equity
investment. One must be highly aware of
what it is all about and what it entails before investing because a wrong move
can lead to big losses.
To make it a bit clear, private equity is
all about raising funds for a company with no obligation of having to pay back
the dividend to shareholders. The concept of private equity is vast and
complex, though through good research and understanding, one can make some good
investments. Here are a few points to keep in mind while making some
investments in real estate India.
Read on to know more.
Know the
company well before making investment
Before
investing in growth capital India,
ensure that you know the company well. Consult regular reports and enquire
about cash flows etc., take note of the audits as well. Cross check for your
safety as it is a prime concern. You can’t let your funds go waste in any case.
If you do your research, it will be quite beneficial for you! So learn about
the company thoroughly.
Know
when is the right time to move on
Whatever
industry/ company you choose to invest in, check the exit scene for them. To
have an impressive acquisition target, with what margins can you go public.
Check the potential buyers when the business reaches a certain height.
Stable
cash flows is utmost important
A private
equity investment is likely to be good as the deals get improved returns
because a good portion of finance is being used for investment. Using a debt is
known as leveraging company’s assets. Company must strive to also make
considerable interest (monthly, quarterly etc.) and repayments. They can’t miss
those payments either. If they succeed in this, banks will be open to lending
as they can see company’s cash flow and its stability.
Be aware
of con-man
Unfortunately,
private equity market is full of malicious and fraudulent people and in order
to not bear any losses one must be aware of them. Here a good network and
research can help you make a right decision. Don’t fall into the trap of any
such people who are showing you some unexpectedly nice deals.
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