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Private equity (PE) deal activity in India continued its momentum in the April-June quarter of 2010 from the prior quarter, though the total deal value was lower. In the second quarter of calendar year 2010, India saw 57 PE deals at $1.5 billion. This is the second highest quarterly performance in the previous seven quarters. Although total PE deal size in 2Q2010 was 30 per cent lower compared with the prior quarter, it was 70 per cent higher compared with the average quarterly aggregate PE deals in 2009, says an Ernst & Young. Both 1Q2010 and 2Q2010 registered deals worth over $1 billion after a subdued 2009, during which no quarter crossed the $1 billion mark. Also, the aggregate deal value for the first six months of 2010 ($3.5 billion) is now almost equivalent to that of the whole of 2009 ($3.54 billion). […]
The Planning Commission today said that Rs 50,000-crore Infra Debt Fund for financing infrastructure projects will become operational by beginning of next fiscal. A panel constituted by the Commission to look into the changes required in the regulatory framework for facilitating the setting of the Infra Debt Fund (IDF) is expected to give its report by next week. “If everything goes well, the Infra Debt Fund would be reality by the beginning of the next fiscal,” Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters here. He said, “The committee headed by SBI Chairman O P Bhatt which is looking into the changes required in the regulatory framework for creating IDF would submit its report by next week.” […]
Hoping to cash in on infrastructure development in the country, large private equity firms are making a beeline for the sector. The road sector, especially, has been increasingly attracting the attention of private equity players, as infrastructure in general and roads in particular feature on the government’s immediate execution agenda. The 11th Plan has set a $500-billion target for infrastructure spending and this is expected to increase to $1 trillion in the 12th Plan. Norwest Venture Partners and The Xander Group Inc last week invested about Rs 400 crore in Sadbhav infrastructure, an EPC player in the infrastructure sector involved in the development of highways and road projects. According to the reports, Nandi Infrastructure Corridor Enterprises (NICE), which is developing the 164-km toll way between Bangalore and Mysore, is currently in talks with PE players to raise around $100 million. In a recent deal, private equity major Actis in April 2010 formed a $200 million joint venture with Tata Realty & Infrastructure to develop roads and highways. India Venture Advisors in May 2010 also invested Rs 50 crore in C&C Constructions, a player in roads and highways. […]
Private equity (PE) players are again ready to look at small and medium enterprises (SMEs). “The conservativeness of investing in the secular sector has faded and PE players are ready to put their money in emerging areas with high growth rates,” said Sharath Naru, managing partner of PE firm Ventureast. In the economic downturn, most PE firms invested in secular sectors like health care, pharma and agri industries to protect their corpus. Now, investors are increasingly looking at high-growth verticals such as technology and renewable energy. Ventureast, which invests around $5 million in the first round and has a investment horizon of five to seven years, is also betting big on these verticals, says Naru. Naru said the firm had closed two new deals this financial year with the second round of funding for another two companies expected this fiscal. “We expect to close six deals this fiscal,” he added. […]
Reflecting recovery in investor appetite, private equity (PE) firms have already pumped in $67 billion globally in the first half of this year, just about $14 billion less than they invested in entire 2009, says a report. PE investments, which were at their peak in 2008, with an aggregate commitment of whopping $248 billion, fell to $81.6 billion in the full year of 2009, according to the data compiled by research firm Preqin. However, the first six months of 2010 have seen private equity deals valued at $67 billion on account of the increased investor confidence, after last year's dip in fund raising due to economic downturn, the report said. “H1 2010 has shown signs of a healthier fund raising environment, with funds exceeding their target capital commitments, ” it added. It said telecom, media and communications, consumer product and consumer services accounted for the major chunk of money invested by PE firms up to June this year. […]
Private equity investment in emerging markets is again on the rise, with a 55% year-on-year increase over the first half of the year, research shows. Data compiled by the Emerging Markets Private Equity Association (EMPEA) found fresh investment in the area stood at $13bn for the first six months of 2010, compared with $8bn at the same time last year. EMPEA said the total value of private equity investments made in the first two quarters of 2010 was $4.5bn more than that invested through the same period last year, led by an investment surge in Latin America and continued strong activity levels in China and India. Fundraising levels are also showing signs of rebounding, with $11bn raised in the first half of 2010 compared with $9bn over the same period last year. […]
Private equity firms have invested over $5 billion in Indian companies so far this year, more than what entire 2009 saw. The PE companies, however, have also sold off shares worth about $2.5 billion yet. As many as 220 companies saw PE investment pouring in during the first seven months of 2010, or between January to July, while PE firms made an exit from 73 other companies. According to data compiled by deal space research firm VCCEdge, the first seven months of 2010 have seen private equity deals valued at $5.1 billion, as compared to $4.3 billion in entire 2009. PE firms generally exit from their investment through buyback of shares by promoters, open market transactions, merger and acquisitions and public offers. […]
The companies in the food, drink, consumer goods and retail sectors are going strong with their mergers and acquisitions (M&A) in spite of the slowdown in the global economic recovery. This trend is more visible in the developing countries, finds a study done by KPMG's Global Consumer Markets practice. In fact, the next 18 months may see a rise in the M&A activities in the consumer sector. The study, called the 'The Strategy Game- Prospects for M&A in Consumer Markets, 2010 and Beyond', was carried out in various countries like the U.S., Canada, Spain, UK, Poland and Central Europe, Russia, South Africa, Australia, China and Hong Kong, India, Brazil, Argentina, and Mexico. Interviews were conducted with senior KPMG and M&A professionals on their outlook for M&A activity in the consumer sector over the next 18 months. The study also revealed that while economic indicators point to a decline in manufacturing output and weakening share prices, consumer companies in some countries are being targeted both by international buyers looking to enter new markets, as well as local companies looking to strengthen their presence domestically. […]
In the 20-company portfolio of Nexus Venture East, a $320-million venture capital (VC) fund, three businesses stand out. There’s Suminter India Organics, which does contract farming for organic produce; D.light Design, which provides solar lighting solutions; and Sohan Lal Commodity Management, which provides grain warehousing facilities in small towns and villages in 12 states. Nexus refers to them as ‘impact investments’ — businesses where the pursuit of profits is accompanied by the premise of social good. In the four years it has been in India, Nexus has invested $10 million in social businesses. However, in the next six months alone, it expects to match that amount. Says Sandeep Singhal, co-founder, Nexus: “Businesses are targeting the bottom of the pyramid because people have a genuine ability to pay. So, we are looking at a few good deals in this space.” It’s not just Nexus that is looking at a sharp increase in exposure to social businesses. […]
Food processing and agri-based companies seem to have caught the attention of private equity (PE) investors, if the recent investment numbers released by accounting and consulting firm Grant Thorton are anything to go by. PE players have invested $300 million in these companies during January-June this year, according to Grant Thorton. In 2009 calendar year, PE investments in these sectors were about $398 million. The comparative figures in 2008 and 2007 were $187 million and $4.3 million, respectively. “The writing is on the wall. PE activity is growing in the space,” said C G Srividya, partner, specialist advisory services, Grant Thorton. According to Srividya, PE players are attracted by greater professionalism and accountability, openness to outside investment, and fairly attractive valuations of these companies. […]
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