Analytical Study Of Venture Capital in India

The concept of venture capital deals with the great amount of financing to undertake big projects. Venture Capital is money provided by professionals who invest in rapidly growing companies that have the potential to develop into significant economic contributors. The funds so collected are available for investment in potentially high profitable projects at a high financial risk of loss. It has been observed in recent years that Venture Capital Investments are made into high growth sectors like Technology and Knowledge based industries. Bio-tech, wireless, Pharmaceuticals are some other growing sectors that attract venture capitalists. Venture capitalism in India began in 1986 with the start of the economic liberalization. In 1988 the Indian government formalized venture capital by issuing a set of guidelines. During initial years Venture Capital was confined to subsidiary set up by IDBI, ICICI and IFC, keeping focus on large Industrial concerns. The turning point came when the well established startups by Indians in the Silicon Valley convinced foreign investors that India had the talent and scope for economic development and growth. Indian startups have never had it so good, with the flow of venture capital investments turning into a flood. A completely new field that is attracting venture capital is agriculture. This has been fuelled by the realization that food security is a vital, long-term necessity. Studies suggest that in future, for every Rs 100 increase in GDP, Rs 41shall be spent on food. This study would be an exploratory study. The objective of this study is to find out the investment of funds by Venture capitalist in different sectors like Real Estate, Telecom, InfoTech, Media, Biotech, Agriculture, Banking, Insurance and Pharmacy. This study focuses on top 10 deals by Venture capitalist in the year 2015 executed in India. Sector wise number of entries and exits by Venture capitalist is compared. Foreign Venture capital investment in various sectors in India is also analyzed.