Know About These 4 Points Before Investing In Private Equity


Private equity investment is quite a tricky concept to understand. One must be highly aware of what it is all about and what all it entails before investing. Equity is all about raising funds for a company with no obligation of having to pay back the dividend to shareholders. 
The concept is a pretty vast and risky business. But to increase your chances of success and good returns on private equity investment in India, there are a few points you must keep in mind. We narrowed it down simply for you. Take a look-                     





Stable cash flows:

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 debt is known as leveraging the company’s assets. The 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 the company’s cash flow and its stability.

Know the company:   

Before investing in the Indian real estate, 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.  

Take wise counsel:

If you are new to the world of private equity then it would be a rather good idea to wise counsel from those who have invested their money on this platform before. You would easily find someone amongst your colleagues or friends who have invested their money and yield returns. Also, make sure to take counsel from someone you know as there many out there who may take you in the wrong direction in order to mint money.   

Know when to exit:

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.
Keeping these points in mind while making a private equity investment can turn out to be worthwhile giving you out humongous returns. Ensure the tiniest of details to grab good deals and best investment returns. 



Comments

Post a Comment

Popular posts from this blog

How to prepare a perfect pitching strategy for your equity firm

To secure funding for your firm or start-up is one of the most important things for the health of your company. Many pitches made to limited partnership firms (LP) fail because of one little piece of information that you forgot to put or did not put in the right place. For some, the presentations are where you make or break your pitch and to garner and hold the attention of the people who will help you secure your funding is very important. To help you secure your private equity funding and ensure a better future for your company, here are a few tips:   Keeping the presentations short and crisp The presentations should not be long and tedious because no LP would want to sit through a pitch that would beat around the bush and not get to the main highlights as soon as possible. The first couple of minutes are the most crucial and this is the time where you should embed your most important messages. Presenting the track record at the start Anyone investing in any typ
Read more

Real estate investment—Is it a smart move?

Image
Often termed as the safest bet in investment business, real estate business can bring a lot of profits if done right. They are safer than shares, bonds, mutual funds or debentures which are subjected to market risks. Here are a few elaborated reasons why real estate investment is the smartest move. India is ready for investment business Growth capital in India has proved to be an excellent and reliable source of profit. Property prices have seen an upsurge in the past 5 years, and will continue to go higher as predicted. The sector might have seen some downfall due to demonetization but likely to pick up the pace once again.   Can be used for commercial or personal purpose A property in the form of a land, building, flat or office space provides a steady stream of income if not used for personal purposes. By renting it out you can yield maximum benefits, and this proves to be more beneficial if the property is in a posh colony. Renting out the property also helps
Read more