| Q. Why Private Equity? |
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Companies going through a high growth phase, at some point, need to take their capital financing decision for taking their business to the next level. Since, most companies have existing relationships with banks, debt is most often the easiest available source of funding and hence the preferred option. However, as a long term strategy, we at Knox believe, the company has more to gain by raising equity financing from external investors. It helps the company re-ascertain their growth plans and get it validated by external investors, as well as lower the financial risk of the company by bringing down the debt equity ratio of the company.
- Private Equity versus Public Issue
| Private Placements |
Public Listing |
- Initiation into the capital raising process.
- Less stringent SEBI requirements.
- Pre-IPO preparedness.
- Better valuations when going public.
- Improved Corporate Governance.
- Provides credibility across product markets and financial service providers.
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- Stringent SEBI requirements before funding.
- Extensive SEBI and Stock Exchange compliance and regulatory requirements.
- Frequent investor information decimation.
- Managing varied investor expectation.
- Subject to market volatility.
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