Published On:April 8 2008
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Private equity investments reaches $3.3 bn

Bangalore: Private equity firms invested about $3.3 billion across 97 deals in India during the quarter ended March 2008, according to a study by Venture Intelligence, a research service focused on private equity and venture capital.

The amount invested during the quarter was higher than that during the same period last year (101 deals totalling $2.7 billion) but lower compared to the immediate previous quarter (which witnessed 131 deals totalling $5 billion).

The largest investment reported during the first quarter of 2008 was the $395-million raised by Sophia Power Company, a part of the Indiabulls Group, from Lakshmi Mittal-promoted LNM India Ventures and Farallon Capital. Telecom continued to attract investor interest with KKR and Morgan Stanley investing significant capital into outsourced tower infrastructure firms like Bharti Infratel and TowerVision respectively. Other companies that raised $100 million plus rounds during the period included Cairn India, Ballarpur Paper Holdings, and travel technology firm InterGlobe Technology Quotient and the Karnataka based health care venture, Narayana Hrudayalaya.

“Despite the turmoil in the global financial markets, PE investments during the first quarter registered growth over the corresponding period in 2007 thanks to a spurt in deals in the ‘Late Stage’ segment which accounted for 60 per cent of the amount invested,” noted Mr Arun Natarajan, Founder and Chief Executive Officer of Venture Intelligence. “While the steep decline in public markets is leading Indian companies to adopt a wait-and-watch stance vis-À-vis their fund raising plans, in the medium term the correction is likely to favour private equity emerging as an attractive alternative,” he added.

PE investors chose to invest in a broad range of industries during the quarter. While Energy and Telecom attracted the most capital, Information Technology and IT-Enabled Services continued to account for the most number of deals.

Other industries that attracted significant PE capital during the period included Manufacturing, Healthcare & Life Sciences and BFSI (Banking, Financial Services and Insurance), the report said.

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