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Private equity fuelling healthy growth

The health sciences sector has historically been one of the favoured sectors for PE firms in India and globally. In the former years, there were early stage investments in firms like Ajanta Pharma, Medicorp, Gland Pharma, Neuland, Biocon etc. Majority of these were led by Indian Venture Capital (VC) firms and were done in the late nineties. As the sector grew dramatically and Indian firms achieved perceivable success in the global generics arena, the size of deals and stage of investment changed. While there have been large deals such as Matrix, Emcure, Jubilant, Apollo, they have been comparatively fewer and majority of the deals average on/at $15-20 million range. As per industry estimates, PE statistics of 2007 show that the health sciences sector accounted for only two percent of the total PE market in India. Funds which have been active in the health sciences sector are ICICI Ventures, CVC, Chrys Capital, IFC, Actis and Schroders. While formulations and Active Pharmaceutical Ingredients (API) were the key areas of interest earlier, outsourcing Contract Research and Manufacturing Services, (CRAMS) and healthcare has been the dominant investment themes in recent times. Outsourcing/CRAMS continues to be a favourite with three major investments this year (Sai Advantium, GVK Biosciences, Siro) focusing on this theme. Two large deals (Max/IFC and Apollo/Apax Partners) this year in healthcare reiterated the importance of healthcare in the portfolio of large, global funds. […]

India most targeted PE investment destination in Asia

Buyouts by private equity investors this year account for 15 per cent of the total M&A deals in the country. This has increased four per cent from the same period last year. The most significant PE deal in the country has been the 324 million dollar buyout of 14 per cent stake in Akruti City by Citi Venture Capital International and American International Group this year. PE investments constitute eight per cent of the total global M&A volumes, while they account for six per cent of the deals in the US so far this year. The average size of the PE deals in 2008 so far has been 49 million dollars, against 27 million dollars last year. […]