The second day of the IVCA Conclave 2024 in Mumbai witnessed an insightful fireside chat between Shri Sivasubramanian Ramann, the Chairman and Managing Director of the Small Industries Development Bank of India (SIDBI), and Shri Pradeep Ramakrishnan, Executive Director of the International Financial Services Centres Authority (IFSCA). The discussion, moderated by Vikram Gupta, Founder and Managing Partner of IvyCap Ventures, delved into the challenges and opportunities in private capital and the regulatory framework governing it.
Shri Ramann initiated the conversation by highlighting the distinction between public and private capital. He emphasized the need for a limited but effective regulatory framework for private capital, which lacks the structured regulations associated with public capital aimed at protecting retail investors. He stressed the importance of democratizing ownership of stock and the need for a significant 10X growth in private capital in India.
According to Shri Ramann, while much of the private capital has historically originated from abroad, there is a growing trend towards domestic capital contributing to Alternative Investment Funds (AIFs). This shift underscores the need for capital that is willing to remain patient for extended periods, especially for investments in sectors such as semiconductor manufacturing and deep science portfolios. Shri Ramann urged regulators and policymakers to craft regulations that align with the evolving needs of the market and encourage the growth of private capital.
When discussing strategies to attract dollar capital, Shri Ramann highlighted the importance of demonstrating better fund management practices and a track record of successful investments. He noted that what may start as a trickle of domestic capital could potentially transform into a flood, given the right conditions. Addressing concerns around country risk, he acknowledged the government’s role in injecting capital into the market, citing the example of the government’s investment of ₹10,000 crores to support the growth of the industry. He also mentioned recent budget announcements, including allocations of ₹1 lakh crores for innovation and ₹50,000 crores for deep-tech and defense-based research, which are expected to catalyze the formation of more AIFs and support the growth of innovative companies in India.
In conclusion, Shri Ramann’s insights underscored the importance of fostering a conducive environment for private capital growth in India. His call for a 10X increase in private capital and the need for thoughtful regulatory frameworks reflect the ongoing efforts to unlock the full potential of India’s entrepreneurial ecosystem.
