Published on January 30, 2023
The quote will be attributed to Rajat Khurana, SVP – Private Markets, Lighthouse Canton India
“India has emerged as an important destination for venture capital on the world stage & is ranked currently as the third largest start-up ecosystem in terms of the number of unicorns. We are making a significant mark on the global stage, however there is still ample scope to make it more feasible from a regulatory standpoint. Especially on the taxation front, simplification and parity are crucial elements for putting unlisted equity at par with listed equities, both in terms of tax rates as well as holding period for defining LTCG & STCG.
Also there is a lot of discussion around the increase in minimum ticket sizes for AIFs from 1 crore to 5 crores. While there is a need for an increase in ticket sizes, it should be implemented in a gradual manner. A large percentage of capital streaming in is still foreign, but we do see a gradual increase in the domestic institutional investors and large single-family offices where they have shown great interest including the allocation of portfolios. However private capital is still a relatively new asset class that many 1st time investors are closely watching. Herein, a 5X increase might act as a deterrent for someone who wants to test the waters, gain better understanding of the asset class, and increase allocation over time. Even though the increase is warranted, a fivefold increase might be more of a sneer than a facilitator.”