Private equity paves road for India's infrastructure

The slew of big-ticket infrastructure projects in India have raised the return expectations of the private equity players, raising the cost of capital for the companies who are in urgent need of capital to start the projects. On the other hand, competitive bidding processes for major public utility projects will likely moderate the returns for private equity funds, Gopal Sarma of Bain & Company said. "They will have the comfort of quasi-monopoly assets, but on the flipside given that these are public utilities there is going to be some natural banding of returns," he said.