There’s a new pecking order for private equity investors in India. Temasek, the Singapore government’s investment arm, has emerged as the largest PE investor in terms of investments announced this year, followed by the US-based Blackstone group. There’s a close race for the other top slots among Goldman Sachs, Carlyle, Citigroup and DE Shaw. Last year buyout major KKR and Providence were the top two PE firms investing in India. The total value of PE deals announced this year grew more than 100% to cross $17.14 billion. This includes three big deals announced by Temasek worth $2 billion, which would materialise only next year and it is possible that the final figure may be different. The list includes the 4.99% stake deal in telecom major Bharti Airtel worth around $1.9 billion (based on the market value on the date of announcement), the $55-million investment for 10% in Tata Sky and $26.5 million for a 27.7% stake in courier firm First Flight. According to data compiled by advisory firm Grant Thornton, the other big PE investor in India was Blackstone, which struck eight deals, some in quick succession, pumping in around $1 billion. Blackstone was involved in a couple of buyouts — Intelenet Global Services and Gokaldas Exports — apart from acquiring minority stakes in Eenadu Group and Nagarjuna Construction. […]

It’s not only India Inc but also PE firms such as Sequoia Capital and Providence Equity partners which are making a beeline to buy out teams in the newly-formed Indian Premier League(IPL). Sequoia Capital, a private equity firm, which has invested in Google and Providence Equity, is one of the largest private investment firms specialising in equity investments in media and communications companies globally. According to sources close to the developments, the Board of Cricket Control of India (BCCI) has received more than 60 Expression of Interest (EoI) from leading PE firms besides multinational companies and heavyweights from India Inc till now. “We’ve received EoIs from some leading companies such as Reliance, Airtel, Kingfisher and some other individuals. And yes some PE firms have also applied,” a BCCI official told SundayET. […]

Private equity (PE) investments into India have surged during the current year; the announced value of deals has crossed $15 billion during the year-to-date, nearly double the $8 billion received in 2006. PE flows confer a number of benefits. At the macro level these include widening the availability and source of capital, increasing the accuracy of company valuations (factoring in their growth potential), enhancing the efficiency of corporate capital structures and facilitating corporate development. At a micro level, benefits include avoidance of bankruptcy or other legal restructuring up to and possibly including governmental intervention or, more positively, providing financing and executive skills lacking in current management. However, for regulators, charged with the multiple objectives of protecting investors, ensuring that markets are fair, efficient and transparent and reducing systemic risk, rise of PE during the past few years poses a number of ticklish issues. A recent paper (comments invited) of the technical committee of the International Organisation of Securities Commissions (IOSCO) has identified six such broad issues. […]

When steel-pipe maker Welspun Gujarat Stahl Rohren (WGSR) won the contract for the world’s deepest gas pipeline in the Gulf of Mexico from El Paso, not only did it earn accolades from National Geographic, but it also had Europe’s largest private equity firm 3i Investments sit up and take notice. Says Anil Ahuja, managing director and co-head, Asia, 3i Investments: “WGSR is among the top few global suppliers of line pipes in the oil and gas sector. It’s a space we liked but could not get an unlisted player to invest in, so we picked up a 6.6 per cent stake in WGSR for $80 million (Rs 320 crore) from the secondary market.” Mergers and acquisitions are passé, the new buzz on Dalal Street is PIPE—private investment in public equity—as private equity players make the 8,000-strong listed companies their new target. While the foreign institutional investors have been busy chasing the bluechips, the private equity players have been quietly hunting on Indian bourses for small and mid-cap companies. And the sectors seeing maximum PIPE deals are cement, construction, oil and gas and infrastructure. As a trend, PIPE is no more than five years old, even in the global markets. From $20 billion (Rs 80,000 crore) in 2000, global PIPE deals have risen to $45 billion (Rs 1.8 lakh crore) in 2007. Till October, $1.71 (Rs 6,840 crore) billion had been invested in 16 PIPE deals in India against $1.25 billion (Rs 5,000 crore) across 36 deals in 2006. […]

Bollywood is beginning to enjoy the benefits of corporatisation. As the world’s largest film industry organises itself into a bigger and better-managed entity, it’s being helped along by a steady infusion of funds, not the least from private equity (PE) investors, who have been pouring money into sectors like infrastructure and real estate. Although PE activity was slack in 2007—and no one is willing to give out details—experts believe that the New Year may see a lot of development on that front. With the industry growing at a frenetic pace, everyone agrees that filmmaking in India is no more the job of an individual producer or financier. Second, the growth of the film industry has attracted PE players the most. Third, with the onset of corporatisation, foreign investors feel investment in the film industry is a safe bet. According to a study by FICCI-PricewaterhouseCoopers, the size of the entertainment industry, which was pegged at Rs 8,400 crore in 2006, is likely to double by 2011. So, how are PE funds being routed to the industry? Experts say equity is coming into the industry through both foreign and domestic routes. According to reports, some of the big film production houses are in the race for PE funds to fuel their business growth plans. The trend began last year when PE investors like 3i, Cisco and Oman International Fund invested Rs 552 crore in the media and entertainment house Nimbus Communications—producer of films like Sarhad Paar, which flopped, and the Sanjay Dutt-starrer Yakeen. PE funds have got more aggressive plans in the movie sphere in the future. […]