|
|
Even as numbers of private equity deals fell in the later half of April 2008, real estate seemed to suck in whatever was available. Around 78 per cent of the private equity money went into real estate in the period. For the four months January-April 2008, 33 per cent of private equity money has gone into real estate according to a report by global audit and consulting firm Grant Thornton. Real estate is tailed by power at 17 per cent. Another global firm Dealogic has identified India as the second biggest private equity destination for 2008 in Asia, with Japan in the lead. The total number of deals in the second half of April was only eight compared to 24 deals in the first fortnight. The slowing down comes after a active period that saw 156 deals being struck in the first four months of 2008, the Grant Thornton report said. […]
Global private equity companies are no longer interested in investing in pure pharmaceutical research and development companies with less attractive pipelines and in early-stage drug development, said Steve Arlington, global pharmaceuticals advisory services leader, PricewaterhouseCoopers (PwC). “Private equity players look at returns in the short run and drug discovery research is a high-risk business involving big investment for a longer period of 10-15 years. They prefer to invest in contract research companies or clinical trial companies or those having promising drug pipelines and products in late-stage clinical trials,” he said. In a recent trend, India's leading drug companies have hived off their R&D assets to separate companies to insulate the investors of parent companies from risks associated with long-term drug research, and to attract private equity funding for drug research. The hived-off facilities are yet to announce any private equity participation or strategic investment. […]
From the market participant’s point of view, research from KPMG points out that there are 255 active funds in India and many more heavyweights like KKR and Bain waiting to come in. So, the party is set to get bigger. In terms of sheer influence, PE nominees sit on boards of more than 1000 Indian companies and that includes some of the largest Indian companies like Bharti, Tata Teleservices , Idea and Pantaloon. The peripheral industry around PE is already worth more than $100 million and growing. The numbers may be small when taken in the global context, but for a sector that truly came on its own just four years ago, it’s a remarkable footprint. In the late 90s, you could count funds on your fingers – Baring , CDC Capital, Draper, HSBC Private Equity, Warburg Pincus, Chrysalis Capital. Now even I-bankers feign ignorance over some exotic sounding funds. It’s not an 800-pound gorilla yet, but it’s well on its way to becoming one. […]
Private equity (PE) firms seem to have sharply improved the fortunes of some of their investee companies. Data collected by Four-S Services — a research, financial consulting and business content services provider — show that companies with PE funding have performed much better in terms of operational efficiency vis-a-vis similar-sized non-PE backed firms. In India, private equity has moved on from being just a financier and stakeholder to expertise creator. It helps investee companies in a host of activities — forging strategic alliances, assisting in corporate governance and providing management advice. The Four-S Services study has found a positive difference in the sales growth of PE-backed and non-PE backed companies. Between 2002-03 and 2006-07, PE-funded companies witnessed sales growth of 27.5 per cent (four-year CAGR) compared to the 18.6 per cent growth for non-PE backed firms. […]
Wherever there’s a whiff of money, they are likely to be the first ones on the spot. No surprise then that financial whizkids – whether from private equity (PE), investment banking or even conventional banking – are keeping close tabs on IPL. With IPL already worth close to $2 billion and teams needing to fork out close to Rs 600 crore every year combined, they are restless for a piece of the action. Most PE funds target 25-30% annual returns, irrespective of which way the market goes. Given the fanatical following cricket gets in India and the possibility that the league will be even bigger next year, the game, they believe, offers as a good an opportunity as the corporate world. While they’re proceeding with caution, they’re clear it is important to open their account in this game early. Arun Natarajan of Venture Intelligence, a private equity research firm, believes the IPL is a good fit for PE firms given that they tend to favour businesses that cater to a large mass of consumers. […]
India's bull run in the private equity (PE) sphere gets hotter, as a whopping $1.3 billion in PE funding was cemented at the recently held India Private Equity Fair 2008, in Mumbai. The event, was organized by Yen Expo, part of Mumbai-based merchant banking firm, Yen Management Consultancy. The fair was attended by a large number of PE players, venture capital firms, high-net worth individuals and angel investors. As per a report by consultancy firm Grant Thornton a total of 32 PE deals valued at $560 million were announced in April 08. March saw greater PE action as funding worth $1.2 billion has entered the country. PE players like Goldman Sachs, LightSpeed Venture Partners, Axis Private Equity, Actis PE, Tano Capital have a combined investment line up of $500 million, deals of which will be signed in the coming months. The sectors to benefit this PE windfall include real estate, hospitality, infrastructure, pharma, biotech, automotive, telecom, media and IT. Large PE deals of over $100 million have come down in recent months, but going forward the deal size is likely to grow bigger at $200 million and above. […]
Private equity investments, which ballooned to nearly 25 billion dollars over the past four years are likely to continue strongly through 2010, driven by robust economic growth and attractive market valuations, a latest report says. According to a study by global consulting firm, Boston Analytics, around 903 private equity investments worth 24.8 billion dollars in value were made in India from 2004-2007, with more than 45 of those deals exceeding 100 million dollar. In 2003, private equity investments were just 56 with an average size of 8.4 million dollars but it increased rapidly in the past four years to 387 deals worth on average of 36.8 million dollars by 2007. According to the report titled 'Private equity landscape in India', demographic and economic factors spurred this rapid growth. The liberalisation of India's economy coupled with a middle class that grew to more than 300 million provided an increasingly diverse skill base awash with more and more disposable income thereby resulting in a large consumer base and a need for a variety of different services. […]
With the Indian real estate market slated to grow 35-40% in value terms over the next two years, private equity (PE) players are lining up significant investments in the segment. Led by Blackstone and the PE arm of Deutsche Bank, a host of players—including Red Fort Capital Advisors, Starwood Capital and Walton Street—are expected to invest close to $12 billion combined in homes, offices, townships, hotels and other projects. Red Fort Capital is preparing to invest Rs 3,500 crore, mainly on budget hotels, while Starwood is committing Rs 800 crore to Chennai-based Shriram Properties. Deutsche Bank will help Suncity Projects raise Rs 1,500 crore, and the Blackstone Group has said it would invest around $18 million (around Rs 73 crore) in Synergy Property Development Services. Kuldeep Chawla, director, Red Fort Capital, said, “We will focus on developing a chain of budget hotels by associating with local developers. About 400 budget hotels with 60,000 hotel rooms are expected to come up in India. We will look at investing in a diversified portfolio of properties.” […]
The private equity (PE) industry is likely to witness a slowdown by as much as 50% by 2010, say industry experts. After riding on a boom and witnessing stupendous growth year-on-year, PE players such as Baring Private Equity Partners, ChrysCapital, India Value Fund Advisors and Kotak Private Equity Group among others have indicated that they will soon take a conservative approach towards investments. According to Baring, PE firms are overexposed in India. While valuations on the country’s share market have more than quadrupled over the last five years, corrections too are slated to happen. “After fuelling a boom, PE investments will witness a slowdown. India will see half the number of investments in the next couple of years,” Baring Private Equity Partners (India) managing partner Rahul Bhasin told ET. According to industry experts, export-oriented sectors such as IT and ITeS and real estate will witness lesser number of deals in the next two years. Also, the global slowdown will have some impact on the economic growth in India and that in turn could impact the demand for growth capital. […]
India’s current market situation and the dynamics of its economy are likely to result in continued private equity growth in the coming years, said a study by Boston-based research firm Boston Analytics. “A correction in the stock market, leading to 21 per cent decline in the benchmark index BSE Sensex, in the first two months of 2008, has eased valuations of target companies for private equity investments,” said the study titled “The Private Equity Landscape in India.”The high GDP growth, projected to be 8.4 per cent in 2008, favourable demographics with roughly half of the population under the age of 25, a high domestic savings rate of more than 30 per cent and a comfortable foreign exchange reserves position worth $301 billion in February 2008 also augured well for the private equity investment, it said. […]
|
Post your messages.Please refrain from posting offensive messages. IndiaPE accepts no liability for the consequences of your reliance on these postings and messages.
|