Repco Home Finance partial exit and Great Pacific Capital fully exited Edelweiss with over 2x returns. However, some exits were made with huge haircuts, including Blackstone which sold a part stake in its seven-year-old holding in Gokaldas Exports with negative 69.5% returns.
Varun Didwania, vice-president with Helix Investments Advisors, believes that the decision to exit the loss-making investments depends on individual fund strategy with some of them having the capability to wait while some may just take a hit. "There are investments of the 2007-08 vintage where the entry valuations were disproportionately high and those deals might still struggle to recover capital," said Singhal.
Lahiri believes that for infrastructure-related companies, the sector-specific challenges remain in place and it may take a while for them to revive growth. “In case of such investments, PE investors have no option but to wait for turnaround in a company's performance to exit otherwise they will have to take a haircut,” added Lahiri.
Looking ahead, experts believe that though the exit environment is likely to get better, the exit route through public market sales would remain restricted to better-performing companies. "Exits still remain a challenge for most of the investments made since 2008. For exits to happen in a sustainble manner and regularly, companies have to do well fundamentally,” said Lahiri.
Didwania believes the exit route through public market sale is available to only a certain kind of company with certain size and that for many of the smaller and mediumfirms, the strategic or secondary sale still remains a viable option.