by Masood Hussain
SRINAGAR: Experts at a daylong session on private equity suggested popularising the idea can help Jammu and Kashmir manage part of its unemployment and under-employment. This could offer credible alternatives to the potential investors for ensuring better returns for their savings parked with the banks at a very low-interest income.
“In the last one and a half years, we have been able to raise nearly two crore rupees of private equity for various credible ventures,” Shabir A Handoo, who heads the Kashmir Angle Network (KAN) said. “Within the next six months, we plan to raise almost Rs 5 crore as private equity for various initiatives we endorse.”
Managing private equity is not so new to Kashmir but it has not been a mainstream idea. “Aspire Educational Services Private Limited was set up more than a decade ago,” one speaker said. “It has raised Rs 42 crore and is working and contributing. It includes a fresh equity addition of one crore rupees in the last year.”
Besides, Cred Integrated Agro Private Limited, another company also raised one crore rupees. Wild Floc is another company that is currently working to raise the funds that it requires for a new business.
Speakers said that given the crisis that Jammu and Kashmir face on job creation on the ground level, the private equity investment in business will contribute immensely. “We have been following the traditional debt funding of our business but what happens in these cases is that the regulator decides the system has to be followed. The banks offer debts at huge costs after going through the credit history of the applicant and sometimes if he or she missed a timely payment of credit card balance, it can impact his capacity,” consultant SP Qalander said. “Now, most of the businesses are being built with the help of private equity in which the credibility and the idea of the individual who seeks an investment decides everything and not the Sibal score.”
Zamir Qadri told the audience that most of the debts that have been raised for the last few years across the country are getting into areas where no job creation takes place. It is getting into personal finance, which has created a situation in which families are taking more debts as their asset bases are shrinking. In this situation, private equity can be game-changing.
Somer private equity experts from Delhi also spoke to the select gathering and suggested ways and means of walking the talk in a society where the idea is new.
In Jammu and Kashmir, by the end of June Rs 170444 crore were in the bank vaults against which Rs 105593 was delayed, which means slightly less than 62 per cent. “Peoples do not know that the funds they park with banks fetch them returns of not more than eight per cent,” Shabir said. “If part of these funds is used by the people as private equity the entire situation would change and we will see a lot of start-ups coming up.”
KAN is Kashmir’s first initiative to introduce private equity investments in Jammu and Kashmir on the pattern of angel networks, which are actually the movers and shakers of new businesses coming up across the world. Organisers said the beginning has been good and now the idea requires to be a sustained on long-term basis. “It has an element of giving that is rooted in the teaching of Islam,” Prof Sidiq Wahid said. “I believe this will become popular across Jammu and Kashmir.”