Suppose that you have raised $1.5 billion for investing in a particular country and particular field but now you are not getting the permission to invest! Well, it sounds absurd in the age of free market economy but it is a true story. Real estate sector in India is a booming sector now because of the growing Indian economy. Actually, I feel that real estate sector is becoming even more attractive than IT sector in India in terms of making profit. Some foreign venture capitalist firms have raised nearly $1.5 billion to invest in the Indian real estate market. They have applied to operate in India but are not getting the permission. I am quoting from a report of Moneycontrol India:
"CNBC-TV18 learns that about 25 foreign venture funds have applied for Foreign Venture Capital investment licences to Sebi and RBI four months ago, but not a single venture fund has received its licence as yet.
Sources say Trinity Capital of UK has raised 250 million pounds and has a mandate of 18 months to deploy the money and Trinity is waiting eagerly for the RBI approval. Warburg Pincus is also in a similar situation.
The reason for the delay, sources say, is that RBI believes the law is ambiguous about foreign venture capital funds, which want to get in dollars for real estate specifically."
I feel sympathy for the foreign VC firms as they are losing precious time. Naturally, their investors would not wait for eternity. They have even promised good return for the investment. Right now, there are some Indian venture fund organizations who are investing in the real estate sector in India and they have promised 25 to 30% to their investors. Naturally, these domestic are reluctant to see foreign companies entering this market.
In this age of free market economy it is almost impossible to remain isolated and India cannot afford it too as the country is aggressively trying to get foreign investment.
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