Exit options should get better over the next 18 to 24 months, according to a panel discussion at the Indus Enentrepreurs (TIE) summit.
Bobby Majumder, a partner with K&L Gates, said that there was a lot of skepticism in the market regarding exit. According to him, global buyers were coming to India in a big way. There were discussions on the Bombay High Court’s decision over Vodafone, which was a major cause of worry among the companies that wanted to enter India. He added that there should be a corrective case.
 Sandeep Singhal, a partner with Nexus India Capital, said that it was not the right time to exit and that exit options will be much better in 18 to 24 months. Rajiv C Mody, chairman and CEO of Sasken, said that from Sasken’s perspective, this was not probably the right time to exit. He said that the situation was not going to stay the same forever, and was likely to improve significantly in the near future.
According to the panel, the present crisis may not necessarily prevent investors from investing here and force them to look for new areas. However, investors will be selective about their choice of interest. They need to mitigate the risk. It is also important for investment to continue by generating cash. Both entrepreneurs and investors should realise this. There is also a considerable amount of institutional capital.
On the corporate governance front, the Satyam episode was discussed, and Majumder reminded the audience that the market had reacted violently to the episode. Majumder added that there was much more corporate governance in Indian companies than before. Lower salaries in companies are definitely a factor to be considered, and he advised entrepreneurs, "Just stay on board. Don’t be overly optimistic. This is the time to be absolutely paranoid." Rational decision making is very important at this stage, and entrepreneurs should not refuse to accept reality.
Manik Arora, MD of IDG Ventures India, said, "There is also overreaction in cost cutting." He added that the loyalty of employees should be rewarded, and one should not let go of talent. According to him, a 20 or 30 per cent salary cut would be a better option than laying two or three people off. This could also lead to a situation where people resigned following salary cuts. Such measures need to be based on an understanding between employees and management.
There are multiple areas for a company to focus on if it is to grow, and great talent is definitely one of them. But talent is cost, and if there are cost cutting measures in the company, it will not be possible to retain the talent. Mody said that during the crisis, any small entrepreneurial set up would need people with passion. However, they may have to reconsider people who are asking for a high salary. Small entrepreneurs need to understand whether employees have been laid off due to incompetence, or due to problems related to attitude.
When asked whether shareholders were moving back on their investments, Mody denied this. He confirmed that investors were pretty much there. X
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