|
|
The year 2008 is slated to be an interesting year for entrepreneurs and venture capitalists alike. With a mobile subscriber population of over 200 million and a growing internet penetration base, growing middle class and over 70 million TV and satellite homes, entrepreneurs are coming up with innovative ideas and VCs are not stopping short of funding them. In 2007, VC funding in start-ups in India just stopped short of $900 million. In 2008, the VC industry is slated to become worth over $1 billion. And interestingly, it will not be run-of-the-mill IT services. In fact, in a distinct shift, VCs will shy away from investing in IT outsourcing and BPO start-ups due to the rise in value of the rupee. However, consumer businesses revolving around online education, personal gaming, mobile advertising and payments businesses will gain momentum, thanks to the great Indian middle class. Tax breaks to IT and BPO companies are ending in 2009. Unless that gets revived in the Budget this year, VC investments in the tech outsourcing start-ups will decline. […]
Venture capital is a fledgling industry today and I do not expect that to change materially in 2008. It is an industry which contributed less than $1 billion in the year gone by. Given the fact that it is coming off such a small base, it will not be surprising if it grows by 50%. Venture capital-backed companies, however, would still be a small proportion of country’s GDP. This industry has seen a large influx of capital from one of the world’s most sophisticated investors, the ivy league universities. They will continue to increase their allocation to venture capital, especially in emerging markets like India. The Indian venture capital industry that has so far been largely funded by the US will see an influx of funds from Europe and Asia in this year. As companies globalise to look for new markets and build efficient supply chains, venture capital will continue to globalise even further. Venture firms originating from mature economies like the US will set up or strengthen their operations in India. […]
The Indian VC/PE juggernaut keeps rolling. VC/PE investments into the country in 2007 have touched $14.2 billion, almost double of what it clocked in 2006 at $7.5 billion. The number of deals stood at 390 compared to 299 deals in 2006. The figure of $14.2 billion does not include Temasek’s investment of $1 billion in Bharti Infratel announced late in December 2007. It also excludes real estate investments. According to Venture Intelligence India, which tracks VC/PE investments in India and compiles the data for Indian Venture Capital Association, VC investments (seed, early stage and growth capital) accounted for $560 million across 100 deals in 2007. […]
After raising funds and setting up teams in the last 18 months, venture capitalists (VCs) are now ready for some serious action. Investments will accelerate in 2008 and teams will be expanded to accommodate the increase in deal flow. Firms such as Matrix Partners India, Norwest Venture Partners and Canaan Partners will add investment partners while ePlanet Ventures, Helion Venture Partners and NEA IndoUS Ventures plan to hire associates at different levels. The year 2007 saw VC investments scale $900 million (Rs3,546 crore), according to industry reports. VCs invested more than $777 million in 57 deals in the first nine months of 2007, according to Dow Jones VentureOne and Ernst and Young. This is about five times the $158 million invested in the same period in 2006. Silicon Valley’s best, such as Norwest Venture Partners and Draper Fisher Jurvetson set up offices here. Bessemer Venture Partners earmarked a third of its $1 billion global fund for India. New sectors, old sectors Education and energy top the list of emerging sectors VCs are keen to invest in. Online learning services have started attracting investments—in the last three months, three companies— Hurix Systems Pvt. Ltd, TutorVista.com and 24×7 Learning Solutions Pvt. Ltd—together landed funding of close to $12 million. Firms are also scouting for clean tech companies to bet on. VCs continue to remain bullish on the consumer Internet and wireless space. Some, however, are cautious about investing in mobile services companies, while the operator continues to keep the lion’s share of the revenues. […]
Private equity funds are set to gain prominence in the board rooms of India Inc. in 2008. They would play an active role in ensuring corporate governance and undertaking management buyouts. “We expect to see more changes, increased transparency, corporate governance and shareholder wealth generation as private equity influences corporate behaviour within the board rooms,” said Harish HV, partner, Corporate Advisory Services, Grant Thornton. Private equity investments crossed $17 billion in calendar 2007 and are expected to grow by 50 per cent in the year 2008. Data compiled by the international accounting firm Grant Thornton revealed an investment of $17.14 billion in the year 2007. “PE investments will grow to $25 billion in the year 2008,” added Harish. The PE funds are likely to favour infrastructure and allied sectors in 2008, while media and manufacturing could emerge as the dark horses. […]
There are some things that get bigger and better with time. While the ‘better’ part may be debatable, bigger is certainly the case when it comes to mergers and acquisitions. As the new year rings in, experts are betting on another great year for India Inc in 2008. Investment banking circles predict that sectors like IT, telecom, financial services and infrastructure will be in the midst of M&A activity in the current year. Even as sectors like retail and insurance are coming into their own, bankers feel that one can wait for more clarity in guidelines before taking a call. Indeed, the ingredients are all there. India recently became the 11th trillion-dollar economy in the world. In terms of dollar millionaires, India ranks eighth. The year just gone by witnessed a stupendous rise in the quantum of M&A activity in the country with quite a few deals above the $1 billion-mark in size. In 2007, India attracted deals worth $68.32 billion, significantly higher than $28.16 billion in 2006 and $18.35 billion in 2005. Between 2003 and 2007, the value of outbound deals more than doubled each year, resulting in a compound annual growth rate of 108%. Of the total deals, M&A accounted for $51.17 billion while the remaining $17.14 billion was in the form of PE investment. […]
The year 2007 will end as a remarkable year for the private equity (PE) business in India. Recent reports have suggested that PE business may have crossed $17 billion for the year, more than double of $7.5 billion done in 2006. India has also reportedly overtaken China in PE stakes. According to media reports, till October ’07, India had seen around $5 billion more of deals as compared to China. PE fund raising has matched or exceeded the public market — IPO/FPO — route in recent years. In 2006, fund raising from PEs had exceeded domestic IPOs and FPOs by around 50%. In 2007, IPO/FPO route almost tripled to over Rs 73,000 crore ($18 billion). So while PE could not exceed domestic public markets, it still nearly matched it. PE has clearly emerged a credible alternative to IPOs/FPOs for late stage and listed companies. After these excellent numbers, where do we go in 2008? First point — clearly no one expects any slowdowns. These numbers can only grow. “Investors are very bullish on the India story. More money is clearly headed India’s way,” says Sarath Naru, managing partner, Venture East. “New funds are still entering, and India allocations of global funds continue to increase,” says Srini Vudayagiri, managing director, Lightspeed Venture Partners. […]
The year 2007 is clearly the year that saw the rise of private equity funds. According to those tracking the industry, $13 billion (which is approximately Rs 55,000 crore) was invested in Indian markets in 2007. Simply put, a relatively new segment of investors have entered the scene and have pumped in Rs 55,000 crore into Indian companies. Ask any investment banker, and he will call the year 2007 a watershed year as all mandates for fund raising were completed and he is on track to receive a hefty bonus. […]
A clutch of venture capital funds (VCFs), which have invested nearly $419 million in Indian information technology (IT) and business process outsourcing (BPO) firms till date, are now looking to diversify their investments into IT and IT-enabled services (ITeS) firms that generate revenues from the local markets. The move follows a sharp decline in revenues of the Indian IT sector as a result of the rising rupee, sub-prime turmoil and a slowdown in the US economy. The country�s leading IT companies, which have seen a drop in earnings due to the near 12 per cent appreciation of the rupee, have also to counter a possible drop in contracts from their US clients due to a slowdown in the world�s largest economy. As a change in strategy, VCFs are now looking to diversify into sectors such as consumer-based internet and mobile-technology companies, where revenues come from the local market. Venture capitalists are also looking for companies that are expanding geographically � those that are targeting non-US markets. Venture capitalists have pumped in more than $777million into India up to September 2007, according to the India Venture Capital report. About 54 per cent of all venture deals in India were for IT companies, the report said. […]
A slew of cash-rich private equity funds in the Arab world are looking at various investment options in India. If one goes by numbers, there are about 15 GCC (Gulf Co-operation Council) institutions, with a fund size of $10,464 million (about Rs 42,000 crore), willing to allocate a considerable portion of the funds in Indian equities and other private equity opportunities. Shifting political scenario in America and Europe, post 9/11 and concerns of a probable slowdown in developed economies are encouraging Gulf-based investors to turn their focus to growth economies like India and China. “Robust GDP growth, requirement for huge investment in key spaces like infrastructure and real estate, high returns on equity are some of the reasons why Gulf investors are flocking into India. India’s legal framework which protects foreign investors is one of the best in emerging countries,” said Gulf-based Global Investment House’s senior vice-president and international investment head Shailesh Dash. Arab investors (from GCC countries) are interested in sectors like infrastructure, real estate , financial services, and logistics. […]
|
Post your messages.Please refrain from posting offensive messages. IndiaPE accepts no liability for the consequences of your reliance on these postings and messages.
|