By Stephen Aldred

HONG KONG, Sept 24 (Reuters) - Global private equity firm TPG Capital's founding partner David Bonderman said the election of Narendra Modi as India's prime minister had contributed to overpriced buyouts, and warned the new leader may not be able to solve all of the nation's ills.

Bonderman said that while Modi's election was positive for India, the boost in public markets had a knock-on impact on private equity deals.

"There are times when places like India are cheap. That isn't the case now, so we have to be cautious," Bonderman said at the annual SuperReturn private equity conference in Hong Kong on Wednesday.

"In India, the public markets are ahead of themselves, as they often are in India. It tends to be the case that prices follow the public markets in India, and they get out of control as they are at the moment, due in part to Modi euphoria," said Bonderman.

TPG was one of the first global private equity firms to enter Asia, opening a Shanghai office in 1994. It employs around a dozen full-time employees in India and is invested in Shriram City Union Finance, Shriram Properties, among others.

Bonderman said that after the euphoria, there will be a period of disenchantment as people realise the limits of what Modi can fix.

"Most of what ails India can't be fixed by one man and a federal system," he said.

Bonderman pointed to the country's power sector as an example of problems the country faces.

"So India is way underpowered and they can't get their act together to figure out how much they're charging for coal and how much they're charging for natural gas, and definitely you can't get anybody building power plants," said Bonderman.

"Mr Modi can't fix that overnight. Maybe over a decade," he added.

Bonderman declined to comment when asked on the sidelines if TPG was considering an IPO, but did confirm that the firm remained open, but cautious, about the possibility.

(Reporting by Stephen Aldred; Editing by Ryan Woo)