Friday, December 15, 2006

Private equity investments touch $5.5 bn in India

India is turning out to be a real big opportunity for private equity players. The country has seen investments worth $5.4 bn in the first nine months itself for 2006, as against $2.2 bn in the whole of 2005, an increase of a whopping 145 percent, says a recent study conducted by PriceWaterhouse Coopers.

As many as 246 deals were cracked this year versus 169 deals in 2005.

Some of the major investments of the year were Kolhberg Kravis Roberts’ $900 mn in Flextronics Software, Temasek’s $360 mn in Tata Teleservices, Farallon Capital's $143 mn in Indiabulls Financial, among others.

Growing consumer spending leading to the emergence of a high-demand, fast-growing market, and an increasing recognition of India as a high-quality, low-cost production and R&D destination are reasons cited for attracting private equity capital to the country.

However, as against conventional seed / growth funding provided by venture capitalists in the US and the Europe, the Indian market saw more investments in the late-stage funding opportunities, particularly in the pre-IPO and PIPE (private investments in public enterprises) spaces.

Also, unlike the technology boom of the late 1990s and early 2000, investments are now being made across a variety of sectors such as auto components, real estate, infrastructure, pharma etc, indicating a shift in focus from IT / ITeS sectors.

The report also mentions a slate of PE firms, both domestic and international, that have made huge commitments to the India growth story.

Read the article from The Economic Times.

Read the article from The Telegraph, Calcutta.

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