Venture Capital Financing in India: An Analysis of Investment

Abstract

The purpose of the study is to analyze the venture capital investment in India based on secondary data available for the period of 1998–2015. Investment in venture capital industry has increased in recent times. Higher economic potential, favorable operating environment and demography of the country played vital role in this increased investment. In the time duration of 1990–1999 India was ranked 25th out of 64 and raised $945.9 million investment. In the next decade of 2000–2009 India ranked 13th out of 90 nations. During the period of 2004–2008 growth rate of the industry was fastest at global level and took up the third number in terms of investment at global level. This comprehensive data set provided the details about the VC investment that took places of worth US $10059.17 million in 2002 numbers of firms during the 1998–2015. Out of this total investment data set described that only 13 percent venture capitalists opted for fully exit from their investment, 4 percent was partially exited from their investment and major part 83 percent of the total investment still was un-exited status. VC investment significantly contributed in the development of the start-up entrepreneurships. Result showed that IT & ITES industry was seemed to be most lucrative industry because it gained more than the half of the total VC investment. Increased internet penetration and consumer technology played key role in the development of this industry.