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Many entrepreneurs wanting to sell a stake have unrealistic valuations of their companies. This is a major block for private equity (PE) players to close a deal. Also, many do not have a second plan if talks fall apart, according to speakers at the Private Equity Conference at the Indian School of Business. KK Iyer, partner, India Equity Partners Fund, says many target companies have suspended their plans to seek PE funding during the year 2008-09 due to market conditions. Those that have taken the deals forward are now involved in number crunching. Many promoters are also emotionally attached to the companies and do not want to give up their stake and this hampers the growth plans, he says. […]
Even as corporate groups and financial institutions in India are floating their own private equity funds, the downturn in the global economy has affected their fundraising plans indefinitely. However, by exploring new sources such as domestic institutions and high networth individuals (HNIs), a few PE firms have received commitments while a few others remain optimistic about completing fundraising soon. Avendus, the Mumbai-based merchant banking firm, and one of the latest entrants into the PE market, is expected to complete raising Rs 1,000-crore private equity fund next year. The PE firm has started talks with domestic sources for the purpose. […]
The microfinance sector, which has doubled its outreach every year over the last five years, is seeing bigger private equity (PE) investments, as risk-wary investors rely more on rural demand than export-oriented markets. Close on the heels of Hyderabad-based Spandana Sphoorty Financial Ltd’s deal with PE major Temasek for raising about Rs 300 crore, another firm from Hyderbad, Share Microfinance Ltd, is set to close a deal for raising about Rs 200 crore. This year, Jan-Oct, saw about 11 PE deals worth $143 million in the microfinance institution (MFI) sector against eight deals worth $61 million in the same period last year. […]
Most of these families are looking at private equity funds as a way to earn fee-based income. When Infosys’ Chief Mentor N R Narayana Murthy announced his plans to float a venture fund, he joined a number of rich individuals and families who had traversed the same path earlier. Murthy’s earlier colleague at Infosys, N S Raghavan, Wipro Chairman Azim Premji, Anil Ambani, the TVS Family, the Future Group, the Tatas and the Birlas, and a few others have either raised or are raising venture capital and private equity (PE) funds to the tune of close to $5 billion. […]
After investing in four mid-income and low-cost housing projects in the past one year, Indiareit Fund Advisors Pvt. Ltd, promoted by the Ajay Piramal group, wants to refocus its strategy on projects with potential for higher returns. Indiareit will now look at deploying most of its new Rs500 crore domestic fund announced in October in redevelopment and defunct textile mills projects. “There are some 25 mills coming up for development and we want to either bid independently or through a special purpose vehicle,” managing director and chief executive Ramesh Jogani said. […]
Driven by improved liquidity and business confidence, mergers and acquisitions (M&A) as well as private equity (PE) activities in the country are showing signs of recovery and the deal space is likely to see an uptrend in the coming months, experts said. “The optimistic outlook of the global markets is now reflecting on the transactions landscape of the country. The current quarter has set the ground for substantial recovery in the Indian transactions market driven by easy liquidity and increasing investors appetite,” global consultancy firm Ernst & Young National Director and Partner Transaction Advisory Services Ranjan Biswas said. […]
International venture capital investment has bounced back after a second quarter slump but remains significantly below 2008 levels, according to a report by Dow Jones VentureSource. Venture capitalists invested $1.8bn in 297 deals across Europe, Canada, Israel, China and India in the third quarter of 2009, up from $1.5bn in the second quarter, and $100m down from the first quarter of the year. Europe was the main non-US recipient for venture investment, garnering $998m, up 23 per cent from Dow Jones' record lows of the previous quarter. The total is still a 48 per cent drop on the $1.9bn invested during the same period last year. […]
Private equity (PE) firms and hedge funds that had flocked to India have found a way to deal with the dearth of ideal investment opportunities: exit in droves. Four overseas private equity firms and 25-30 hedge and sovereign funds have shuttered India operations in the past year, and more may be on their way out, experts said. While the decrease in the number of PE investments is a fallout of the global downturn, experts said it has changed India’s private equity landscape. Firms looking to raise funds in India have found the going particularly tough. […]
Private equity (PE) and venture capital (VC) investment in hospitals may surpass that in clinical research and drug manufacturing sectors, as hospitals currently offer more assured returns with lesser risks, is the feeling of informed observers. The investors’ interest is not confined to corporate hospitals in large cities. They are also acquiring controlling stakes in small hospitals across the country. Parvez Ahmed, CEO of the Delhi-based Max Healthcare hospital chain, says there has been tremendous increase in PE interest in healthcare investments recently. “This has become very visible in the last five to six months. They have begun to understand the potential in seeing healthcare as a long-term investment.” […]
India’s power sector will be a key destination for private equity (PE) players to park their money, with close to $1.64 billion worth of infrastructure funds, mainly in power, awaiting their launch. According to industry experts, once the liquidity situation improves globally, the sector will see good investment momentum. This is despite the fact that PE investment in the power generation sector dropped by around 80 per cent between April and September 2009, to $157 million (around Rs 770 crore) from $902 million (Rs 4,419 crore) a year earlier. The number of deals also dropped to six from 17. […]
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