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Private equity (PE) and venture capital (VC) deals in India are seeing an uptrend again. Though the first half of 2009 was dismal overall, the number of such deals and the amount of investment therein has risen in the past couple of months. And if market sources are to be believed, the numbers will only get better going forward. Vikram Utamsingh, head of private equity advisory group at KPMG, believes some funds that were busy adding value to their portfolio companies after the global meltdown are now looking at fresh investments. […]
Venture capital firms Sequoia Capital, Draper Fisher Jurvetson India (DFJ) and Norwest Venture Partners India (NVP) are set to see at least nine of their portfolio firms making initial public offerings (IPOs) over the next 24 months—the kind of exits venture capital firms dream about. The companies that are considering share sales are SKS Microfinance Ltd, Comviva Technologies Ltd, GlobalLogic Inc., Coastal Projects Pvt. Ltd, KMC Constructions Ltd and Genesis Colors Pvt. Ltd in which Sequoia has invested; Reva Electric Car Co. Pvt. Ltd and Cleartrip Travel Services Pvt. Ltd in which DFJ has invested; and Persistent Systems Ltd in which NVP has invested. […]
Merger and acquisition (M&A) activity in the country picked up pace in June, with improved economic conditions and better availability of funds prompting corporates to dust off their long-shelved consolidation plans. According to the latest data compiled by advisory firm Grant Thornton, there were 26 M&A deals valued at $850.62 million in June, the most in a month since December. The number of such deals ranged between 17 and 21 since last December, considerably less than the average of 40-60 such deals recorded every month in 2007-08. The slowdown in deal activity in 2009 has been attributed to the global credit crisis, which dried up funding for acquisitions. Companies usually use a mix of debt and equity to finance M&As. Banks and financial institutions, troubled by the credit crunch, had turned cautious on funding deals. […]
At least 43 foreign venture capital investors have been unable to begin investing in Indian start-ups because the requisite permissions from the Reserve Bank of India (RBI) have been delayed. Ten applications have been pending since 2005 and 11 more since 2006. Among the venture capital investors knocking at the door are Google Holdings Pte Ltd, DE Shaw Composite Investments, Sabre Abraaj Infrastructure Co. Pvt. Ltd and Kotak India Venture Ltd. Capital markets regulator Securities and Exchange Board of India (Sebi) is the regulator for venture capital investors but it typically routes applications from foreign funds through RBI and clears them only after the central bank gives its nod. RBI gets involved because capital flows across national borders are involved. Currently, there are 129 foreign venture funds and 132 domestic funds operating in India. […]
Investments from venture capital (VC) firms have fallen by 72 per cent in the first half of this year compared to the same period last year, a study by Chennai-based Venture Intelligence and Global India Venture Capital Association reveals. VC firms committed $117 million in 27 deals as compared to $413 million in 67 deals for the first half in 2008. ''The uncertainty in global financial markets over the past six months has affected VC investing in India as well,'' said Global India Venture Capital Association director Sudhir Sethi. […]
Enchanted by the gradual turnaround of the economy private equity and venture capital investors, who have invested over $2 billion into Healthcare & Life Sciences (HLS) companies in India over the last five years, are now keen to increase their investments in this industry, A survey of over 60 PE & VC firms conducted by research firm Venture Intelligence shows that the investors are especially keen to tap into sectors like diagnostic services, medical devices / equipment, hospital chains and wellness products and services. […]
Private equity investors are confident about the long-term growth in India and other emerging markets, but are adopting a cautious attitude towards new investment activity in the short to medium term, says a survey by the global consultancy firm, Deloitte. According to Deloitte's Emerging Markets Comparative Private Equity survey across eight emerging markets globally, the long-term growth confidence remains positive, even as the impact of economic downturn can be seen across all of these. The survey reveals that a general cautious attitude for new investment activity, however, exists across all the emerging markets. […]
Private equity firms sold their stakes in 21 Indian companies in the first quarter of the current financial year to cash in on the buoyancy in stock markets, even as the number of new PE investments more than halved during the period. PE firms made over $298 million from the 21 exits, compared with $969 from nine investment exits in Q1 last fiscal, according to data compiled by Venture Intelligence, a firm that tracks PE and venture capital developments in India. The amount involved in exits this year is significantly lower than that in the year-ago period. “This is primarily because of the nature of the deals. Last time, firms could cash out through the M&A route, even though the number of deals were smaller,” said Venture Intelligence CEO Arun Natarajan. […]
Improving market sentiments post parliamentary elections seem to have begun showing in the private equity investment space. Private equity investments in June 2009 increased 74% in value terms and 20% in number of deals as compared with May 2009 figures, according to monthly private equity update by Anand Rathi Investment Banking Research (ARIBR). According to data compiled by ARIBR analysts Arnab Banerjee and Sachin Mehta, overall, investments worth $662.7 million were made across 24 deals – as against $332.7 million and 20 deals in May 2009. […]
At a time when raising funds is a concern for private equity (PE) players globally, sponsor commitments are increasingly gaining relevance among funds as a committed source of capital. Experts said that in many cases, it has rescued the funds which were unable to achieve closures due to inadequate commitments. The trend has become especially prominent in the last few months when limited partners (LPs) tightened the flow of capital to private equity funds. Sponsor commitment or anchor investment is the amount of capital committed by the sponsors of a fund. The anchor investment is made at the initial stage of fund-raising to start the process and provide a sense of confidence to LPs. […]
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