Sramana Mitra has an interview with Paul Asel of IFC. I have met Paul on a number of occasions and have been very impressed with his thinking. This is what he has to say on investing in India:
We are optimistic about prospects for India. We believe that India is on a long term high growth path that is sustainable for the next 20 years and are looking at opportunities that will benefit from this growth trend.
At the same time, we are cautious on valuations. There are now 120 venture and private equity firms investing in India. Most have entered India in the last two years so we are seeing a rapid escalation in prices. Infosys and Wipro have achieved earnings growth of 40% per year for the last four years but are only now returning to their 2000 valuation levels. The challenge will be to dig deeper to find hidden gems at valuations that stand the test of time over a 5-7 year period.