Private equity (PE) firms operating in India are plugging energy as the next sunshine industry for investors. And the number of investments made in the sector so far this year seems to bear them out. In the last six months, private equity and venture capital firms have invested $890 million, or Rs3,818 crore, in 14 big and small energy deals, compared with four transactions worth $123 million a year earlier, according to local private equity tracker Venture Intelligence. Reason? In a power-starved nation that is getting more prosperous, energy presents a business opportunity that can be readily scaled up. “PE players look out for scalable businesses and enormous growth prospects. The energy sector in India provides potential for both, as the supply and demand gap is huge,” says Raja Kumar, founder, chief executive and managing director of UTI Ventures. UTI Ventures has invested in half-a-dozen energy or related companies, including Ind- Barath Power Infra Pvt. Ltd and Pesco Beam Environmental Solutions Pvt. Ltd. Apart from project-specific risks, experts say energy-business revenue, particularly in the power sector, can easily be predicted for as long as 10 years. Power requirements aren’t prone to fundamental shifts, they reason.   more »

Venture Capital firms invested $158 million in over 26 deals in the country during the three months ending June 2008, according to a study by Venture Intelligence. The study done in partnership with the US-India Venture Capital Association reveals that during the first six months of 2008 investments of $340 million across 51 investments were completed. "VC investment activity as well as amounts invested during the first half of 2008 has not been affected much by the turmoil in the global financial markets," said Arun Natarajan, CEO of Venture Intelligence. "While IT companies continue to account for a majority of investments, it is quite significant that the proportion of non-IT investments - both by activity and value - has now climbed up to 40%. VC investments are increasingly focusing on alternative energy, media, retail and other consumer demand-led sectors," Natarajan added.   more »