Competition Commission of India (CCI) Chairperson Ashok Kumar Gupta has informed that CCI to start a study shortly on private equity (PE) investments in the country to look at various aspects, including whether PE investors' rights in invested companies could lead to decisions that can impact competition. During the announcement, he said in the current financial year, PE investments have surpassed strategic investments in the country due to the prevailing coronavirus pandemic situation.
Gupta informed about the new trend where FDI and other foreign investments have been overtaken by PE investments. Most of these PE investments are in multiple firms of the same industry, which leads to product-market overlaps, the issue of common ownership by minority shareholders across firms and its impact on competition needs to be understood, Gupta said. "In order to understand the trends and patterns of common ownership by PE investors across sectors in India, the Commission is shortly going to conduct a market study," he said.
CCI Chairperson said the study will focus to gauge the common PE investors' underlying incentives and motivation behind such investments as it is important to look at the rights they get to protect their legitimate financial interests from their shareholdings. The study also aims to look after the extent of proliferation of branded generic drugs in India, its implications for competition and to assess potential hurdles, if any, in entry of bio-equivalent or biosimilar drugs. The CCI keeps a tab on anti-competitive practices across sectors.
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