Difficult fund raising conditions slowed the pace of private equity (PE) investments in the country by 64 per cent to a four-year low of $ 3.8 billion in 2009. Private equity firms made an annual investment of $ 10.47 billion made in the previous year, according to deal tracking firm Venture Intelligence. Such level of investment was last seen in 2005 when PE firms had invested $ 2.2 billion through 167 deals. “It has been a difficult year for PE funds as volatility in public markets and continued uncertainty around the ability to raise new funds caused investment activity to be muted in 2009,” Venture Intelligence CEO Arun Natarajan said. […]

Private equity investments in India, which saw a sharp dip in 2009, could bounce back in 2010 with several large global and local funds in active talks with promoters and managements of firms to put in money. Private equity fund managers, or PE fund managers as they are popularly known, and investment bankers say this year could see increased activity at various levels as several Indian companies have reported robust results despite a testing economic environment. Besides fresh investments and divestment in existing companies, PE funds could also partner Indian companies for global acquisitions and also local buyouts. According to Venture Intelligence, a research service focused on Private Equity and M&A, deal flows plunged to $3.82 billion in 2009 from $10.2 billion in 2008 and $13.6 billion in 2007. Private equity investment tapered off in 2009 as fund managers turned cautious. […]

As was widely expected, mergers and acquisitions (M&As) and private equity (PE) investments in India have seen a substantial decline in value and volume compared to previous years, despite the revival in the second half of the year. The total value of deals (M&A and PE) announced in the calendar year 2009 (January-December 13) was $21.20 billion as against $41.54 billion and $70.14 billion in 2008 and 2007, respectively, as per a latest study by Grant Thornton India. Deal volumes (M&A and PE-QIP together) have dropped in 2009 as compared to 2008. There were more than 766 deals in 2008, as compared to 488 in 2009. The average Indian M&A deal size was $37.55 million, while the average Indian PE deal size was around $50.55 million during the period. […]

Global private equity and real estate funds are looking to check into mid-market hotels with occupancy and room rates in major markets picking up in recent months. A slew of funds including Duet, Starwood Capital, Pacifica, Sun Apollo, Xander and Och-Ziff have renewed discussions with hospitality companies such as Red Fox and Lemon Tree; Roots Corporation, a wholly-owned subsidiary of The Indian Hotels Company that promotes its budget brand Ginger; and Berggruen Hotels, promoters of Keys, industry officials said. Industry watchers say hotel projects and low-income group housing projects are areas where many international asset class funds are looking to invest. […]

Syndication might have been an oft-used investment strategy for large deals, but it is now finding its way into small and mid-sized transactions too as venture capital (VC) funds try to diversify and de-risk their portfolios. Several recent transactions with a value up to Rs 75 crore have seen participation from two-three investors. For instance, Aavishkar Goodwell co-invested $10 million (around Rs 47 crore) in Basix along with Lok Capital and others. Similarly, JustDial received $16 million (around Rs 74 crore) from three investors — SAIF Capital, Sequoia Capital India and Tiger Capital. […]