Falling rupee posing hurdles for PE exits

Sanjeev Krishan, Leader, Private Equity, PwC India 

The depreciation of the rupee against the greenback is proving to be a stumbling block for PEs looking to exit. Most PEs are looking to exit investments that were made between 2006 and 2008, when the rupee was in the 40s against the dollar. At the same time, PEs close to signing deals may gain a bit, as they save on rupee-denominated purchase prices. This, however, would be a very temporary phenomenon.

There could be further pressure on the rupee due to the tapering of the QE by the Federal Reserve. However, if the government can stabilise the currency by taking concrete steps to address growth concerns and find a way to fund its burgeoning fiscal and current account deficit, this may turn out to be one of the best times for making investments in India.

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