October 2012
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PE investments up 4.4% in Q2

Private equity (PE) investments in the country during the quarter-ended September 2012 increased 4.4 per cent to around $2,521 million across 97 deals. However, if you think the investor’s confidence is back, the answer is no.
Thanks to the $1-billion investment by Bain Capital in Gurgaon-based BPO firm Genpact, the investment amount showed a growth in the quarter compared with the same period last year that stood at $2,415 million across 120 transactions.
PEs, which are largely long-term investors, are not yet happy with India’s growth story. Rahul Bhasin, managing partner of Baring Private Equity says,
“The investors are still concerned. India should have grown in double digit, but it is not growing the way it should.” Government reforms should improve productivity, supply and should facilitate the manufacturing sector’s competitiveness, instead of getting into price fixations and tax systems, among others. Industrialists today are themselves looking at other countries for long-term investments which is what is happening with PE investors too.
The total PE investments in the first nine months of 2012 stood at $6,488 million across 309 transactions, as against $8,882 million across 357 transactions in the same period in 2011. It may be noted that none of the figures include real estate.
According to Venture Intelligence’s data, the September 2012 quarter figures saw a healthy 32 per cent growth over the immediate previous quarter, which had witnessed deals worth $1,909 million across 105 transactions. Bain Capital Partners’ purchase of shares held by previous PE investors — General Atlantic and Oak Hill Capital — in NYSE-listed, Gurgoan-based BPO firm Genpact for around $1 billion was the largest PE investment during the third quarter of 2012 by a huge margin, with no other investment crossing the $200-million figure.
The second largest investment was SBI-Macquarie’s $150 million in Ashoka Concessions Limited, a road-construction subsidiary of Ashoka Buildcon.
The IT & ITeS sector attracted $1,295 million, which is 51 per cent of the total value, across 45 deals during the third quarter of 2012.
Investments in real estate
PEs made 10 investments, amounting $394 million across nine deals, with disclosed values during the quarter-ended September 2012. The volume of investments was down by 44 per cent compared to the 18 investments in the same period a year ago. The sector attracted $726 million across 13 transactions with disclosed values, but up by an almost similar figure compared to the seven investments ($172 million across six deals) during April-June 2012.
Blackstone’s proposal to acquire a stake in the office space portfolio of Bangalore-based developer Embassy Property Developments for a reported $230 million (around Rs 1,300 crore), was the largest reported during the third quarter of 2012 in the sector.
According to VCCEdge quarterly deal update, PE funds realised $1.19 billion across 24 transactions, as compared to $0.96 billion across 38 deals during the same period.
Venture Intelligence added that no PE-backed IPOs happened during the latest quarter, as compared to one IPO during the same period in 2011 and two in the immediate previous quarter.
Source: Business Standard

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