Head of Indian Angel Network Padmaja Ruparel Part II: Indian Investment Market

Yesterday, head of IAN Padmaja Ruparel walked us through the relationship between IAN and the newly-formed WBAA (World Business Angels Association). Today, Padmaja gives us a quick snapshot of the Indian market.

* Edited interview

VH: What’s the current investing market in India?

PR: Current Indian markets are at a very interesting point, perhaps a watershed moment. The Indian election results have been announced recently and the market has reacted very, very favorably. From a startup and early stage investing perspective, the current situation is very encouraging:

• Given the current economic downturn, it’s an excellent opportunity for investors to pick up interesting investment opportunities at low valuations.
• With the Indian economy on a “slow down” rather than a “downturn,” there’s clear potential for young ventures to grow, specifically by leveraging the Indian domestic market.
• Some very senior, capable and “performer” teams are coming together to start ventures. These are people who have the ability to bootstrap ventures and bring more bang for the investor’s buck.

New paradigms of doing business are emerging as large amounts of capital being wiped out. This has created a great opportunity for innovative, niche-focused businesses to emerge. At the same time, competent people who were in a comfort zone are now being goaded into entrepreneurship. The current market scenario provides entrepreneurs the opportunity to build a venture at lower costs: infrastructure is discounted; good talents are inexpensive; development costs are reasonably priced; advertisement and marketing prices have been slashed, for example.

VH: What makes the Indian market attractive?

PR: India presents a tremendous investing environment:

• As the world economy plummets, India has only seen a “slow down,” with its growth rate declines from 9% to 6.9%
• It offers world class entrepreneurs with global ambitions but middle class approaches to cost
• It provides a large young talent pool at affordable costs (54% of India’s population is under 25 years old with 2.5 million graduates annually)
• It has a supportive government and venture environment
• It supports a burgeoning middle class with disposable income
• It produces world class products at Indian price points (Nano is the perfect example)
• It provides investors attractive valuations given current market conditions (as stated above)

VH: What obstacles might investors encounter with Indian opportunities?

PR: India’s tax and regulatory framework does present some constraints, specifically on repatriating returns. But this didn’t stop visionary investors from investing in India because of the market potential we offer.

Link:

• Indian Angel Network