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Investment by private equity (PE) firms has declined by 22.9 per cent in calendar year 2008 as most international funds were wary of investing in equity markets on depleting valuations of listed stocks, which has led to fewer public offers, thereby denying an exit route. PE investors put $10.79 billion in 399 deals during 2008 calendar — a decline of $3.2 billion compared to $14 billion invested across 439 deals in 2007. According to Arun Natarajan, Managing Director and CEO of Venture Intelligence, the decline in PE investment is primarily because of the sharp decline in equity prices. PE firms have lost heavily on private investments in public equity (PIPE) deals in 2008 — a value erosion of $0.89 billion (around Rs 4,400 crore) or 53.3 per cent out of $1.67 billion invested in 31 deals. The loss from the 65 PIPE deals of 2007 has been 40 per cent or $2.04 billion out of the deal size of $5.16 billion. […]
Private equity (PE) funds may revive their interest in the real estate sector this year, after a lull of six to nine months, as valuations of properties have dropped by a third, making them attractive for investors, say realty funds and investment advisors to these funds. Most of the funds have not signed any deals in the past few months as realty prices fell sharply and economic slowdown deepened across the world, which slowed the flow of funds significantly. “The amount of money available today is one-tenth of what it used to be. But India-specific funds, which have already raised money, will deploy more in the current quarter than they have earmarked in the last quarter,” said Subhash Bedi, partner of Red Fort Capital, a India-focussed realty fund that has invested nearly Rs 1,500 crore in the property market so far. […]
Fall in the capital market mirrored itself in the corporate India's private equity transactions, which registered a 23 per cent decline during the year 2008 at $10.59 billion, thanks to the effects of the recent economic downturn. There were 312 deals in 2008 with a total announced value of $10.59 billion compared with 405 deals with an announced value of $19.03 billion in the year 2007, according to Grant Thornton's latest annual issue. Though there has been a decline in PE deal s but still India Inc braved the downtrend and managed to attract decent number of such deals. The report further said that the average PE deal value fluctuated from $46.99 million in 2007 to $33.93 million during 2008. There were 28 deals of over $100 million in 2008, while in the year 2007 there were as many as 53 such deals. […]
Private equity players are having a tough time with a slow down in the services and manufacturing sectors, which promised good returns even back. But some investors seem to have found an answer closer to the ground- in agricultural fields.Last year, Indian agro-based companies attracted a host of private equity players, players, who see potential in this space on the back of strong demand and the sector's insulation from the credit-induced economic crisis in the West. The prominent deals in 2008 include the $50 million investment by Blackstone in Hyderabad-based Nuziveedu seeds, which is one of the largest hybrid seeds companies in India. Another prominent example was Morgan Stanley's investment in castor oil maker Biotor Industries, through its Asia fund. More recently, Chennai-based Sree Ramcides, a 36-year old, family-run agro solutions company attracted $5 million from ePlanet Ventures last month. […]
Private equity investments in listed firms have lost nearly $1 billion so far this year largely due to the ongoing downturn in the capital market. An analysis of private investment in public equity (PIPE) in 2008 shows that these deals in the country have lost funds to the tune of $0.89 billion till January 12 this year. The PIPEs of 2008 have lost about 53.29 per cent from their investment of $1.67 billion to current mark to market value of $0.78 billion, representing an absolute loss of $0.89 billion, Nexgen Capitals, the merchant-banking arm of brokerage firm SMC Global Securities, said in its latest report. […]
The global liquidity crisis and slump in the Indian stock markets have clearly made a dent, and a significant one, to private equity inflow into the country. According to a Venture Intelligence report, investments by PE firms fell 23% in 2008 to $10.8 billion. Arun Natarajan, founder and chief executive officer of Venture Intelligence, said, “This is the first time since 2002 that private equity investments in India witnessed a Y-o-Ydecline.” Compared with 439 PE deals in 2007, there were only 399 transactions in 2008. Information technology and IT-enabled services were most preferred sectors, registering 107 deals in the year. […]
Leverage, the Venture Capital and Private Equity Club of IIM Ahmedabad and the Centre for Innovation Incubation and Entrepreneurship bring to you the 1st edition of the Venture Capital and Private Equity Conference on the 6th and 7th of February, 2009. A student run initiative, the business school symposium will bring together industry experts, practitioners, advisors, academicians, and students with the aim of identifying and addressing key issues and trends relevant to venture capitalists, private equity investors, and entrepreneurs keeping in mind the current environment. The theme for the first edition of the Conference, Leverage 2009 is “Venture Capital and Private Equity: Investing and Managing Portfolios in Distressed Times”. […]
The Satyam story poses a big question over the credibility of auditors in general, as PricewaterhouseCoopers was auditor of the company. The bankers to Satyam included Bank of Baroda, BNP Paribas, ICICI, HDFC, Citi Bank, HSBC. Anita Gandhi, head-institutional business, Arihant Capital, said, “The Indian technology industry was a very important driver for the country's stock market for nearly a decade. Satyam's fraud is expected to lead a severe blow to the entire industry with investors being more cautious going ahead. This raises serious questions on the entire due diligence process conducted by the auditors of Satyam. What is more surprising is the chairman's confession after his resignation. This means, all along, he did have vested interest in keeping the investors in darkness.” […]
Private equity (PE) funds slowed their investments in India during 2008 but say they aren’t averse to so-called buyout deals that allow them to take control of a company by buying at least 50% stake. This preference for buyout deals will accelerate in 2009, predict PE investors. Nexgen Capitals Ltd, the investment banking arm of New Delhi-based financial services house SMC Global, notes that that 13 such buyout transactions took place in 2008, up from 11 in 2007. Meanwhile, deals data from consultant Grant Thornton adds up to $17.14 billion (Rs83,129 crore today) worth of total transactions that year, at least 118% more than 2006. […]
Although they’re not buying, private equity (PE) firms aren’t panic-selling either. The number of investment exits or selloffs by PE and venture capital (VC) firms dropped by a whopping 70% to just 12 companies during April-December from 60 companies in the corresponding period last financial year, according to data compiled by Venture Intelligence, a firm that tracks PE and VC developments in India. In terms of value, PE firms encashed $750 million through exits this fiscal as against $1.7 billion during the nine-month period last year. The exits have primarily been in the IT/ITeS, manufacturing and healthcare and lifesciences sectors. […]
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