Profitability Analysis of Select Private Equity Funds in India

Abstract

This study analyzes the solvency and profitability of select private equity funds in India: Sequoia Capital India, ChrysCapital, Everstone Capital Advisors Pvt, ICICI Ventures, and West Bridge Capital. Solvency is determined by the debt-to-equity ratio, interest coverage ratio, and proprietary ratio, and profitability is determined using ratios such as return on total assets, return on investment, and earnings per share. It can be concluded that there are significant differences in terms of the current ratio, debt-to-equity ratio, proprietary ratio, and return on total assets ratio of select private equity funds in India, meaning that at least one of the means of a sample is different. The test results also indicate that there is no significant difference in terms of return on shareholders’ funds, return on investment, and earnings per share. Hence, this ratio analysis is a useful management tool to improve the understanding of financial results and trends over time and can provide key indicators of organizational performance. TOPICS: Emerging markets, private equity, performance measurement