PE funds...

But since then there has been a sea change. The situation has gone from promoters not allowing any say in the management to control deals, in which PEs have a majority stake, constituting 24 per cent of the value of all PE deals in 2019 to date.

Moreover, the average size of the PE control deals is getting bigger; they more than doubled from $65 million last year to $165 million to date. PE funding is becoming increasingly the core for FDI. In 2018, PE funds constituted over 70 per cent of total FDI in the country. Of course, this number would be slightly lower for foreign PE funds as some of the Indian companies raise money within the country. But experts say that it is minuscule and most of them also go abroad. That apart, in a clear sign of maturity, last year the value of exits based on deals undertaken by PEs hit $33 billion.

Clearly, PE funds are cashing in on the new emerging areas of business. However PE funds admit that handling conglomerates needs special expertise and acumen as they are complex deals. For one, it might require carving the potential target into a separate firm or unwinding cross-holdings in group firms. For another, some PE fund managers fear that any increase in the trend to fund promoters through debt instruments morphed as equity, such as compulsory convertible debentures, could only postpone the debt problem of promoters.