PE, VC companies may get direct invite to core projects

The Government is likely to allow Private Equity (PE) funds and Venture Capitalists (VCs) to be part of the consortia that bid for infrastructure projects. At present, these entities can only participate indirectly in these projects by committing funds to one of the bidders. SEBI-registered VC funds and PE firms are barred from bidding for infrastructure projects, as they do not meet conventional qualifications like gross revenue, net worth or net cash accruals. Given that financing of the infrastructure sector is essential to sustain the growth story, the move to enable PE/VC funds to invest in these projects is in the right direction. The Centre is understood to have agreed in principle to the proposal and is examining the impact. This would encourage these investors to participate at the inception stage.