Mumbai: Singapore is emerging as an alternative host for private equity (PE) funds investing in India, said Jai Mavani, executive director, KPMG India Pvt. Ltd, at a PE conference in Mumbai on Thursday.
A handful of PE and venture capital funds have set up shop in Singapore and experts say this number will rise in coming years. With Mauritius, until recently the preferred base for PE funds investing in India, being seen as a “softly regulated jurisdiction” and Dubai in the throes of a debt crisis, more funds will start looking at the island city, experts say.
“While in terms of regulatory requirements and protocol, there is not much difference between Mauritius and Singapore...in Mauritius enforcement is not stringent. So funds are looking at Singapore,” Manvani told Mint on the sidelines of the conference.
Amit Verma of DTOS Ltd, a Mauritius-based legal and allied services provider for PE funds, said some funds already have offices in Singapore in addition to their Mauritius vehicle. “While they are still investing through Mauritius, they are keeping Singapore ready as an additional option,” he said.
Currently, only Ascendas Property Pte (India) Ltd and Indivest Pte Ltd are registered as Singapore-based foreign venture capital investors on the website of markets regulator Securities and Exchange Board of India. There is no data on PE funds.
Vivek Kathpalia, a Singapore-based partner at Nishith Desai Associates, said on the phone that Singapore has two conditions for PE firms setting up base there. “(The) Singapore entity should be in existence for two years and that they should incur expenses of 200,000 Singapore dollars for each of that years.”
He says this mean investors with an investment horizon of under two years would still prefer Mauritius. “But funds like PE funds and foreign venture capital investors , who are sure that they will not sell in two years, are setting up SPVs (special purpose vehicles) in Singapore.”
According to him, Singapore is already a preferred route. “It is the No. 2 destination for foreign direct investment routed into India. The Singapore government is positioning itself as the eastern gateway into India. It wants Singapore to be to India what Hong Kong is to China.”