|
|
Even as private equity (PE) funds pour billions of dollars into India, the average size of a PE deal in the country stands at a meagre $18.5 million. Not only that, it has grown marginally from the average deal size of $14.96 million last year. According to data by Thomson Financial, there have been 178 deals worth $3.3 billion struck this year till mid October, with an average deal size of $18.56 million. In 2005, 73 deals worth $1.17 billion were struck with an average deal size of $16.03 million. The average deal size plunged in 2006 to $14.96 million when a total of 155 deals worth $2.3 billion were struck. “Though there have been a few large PE transactions in India and the total amount of PE funding has significantly increased in the last few years, the average size of a PE deal in India has remained more or less stagnant. This means that while there have been a few large PE deals, the bulk of the deals continue to be very small,” Bain & Co India partner Sri Rajan said. […]
(Contributed by Dr. Alok Aggarwal, Chairman and Co-founder, Evalueserve) Evalueserve, the global research and analytics firm, has identified three major groups of industries in India that are likely to be lucrative for private equity investors. One such group is that of hi-tech services and products, most of which are currently being exported. The second group consists of services that are mainly geared towards the Indian domestic market. And the third group comprises products and services related to high-end manufacturing and infrastructure. The hi-tech services and products category includes Information Technology (IT) and application development, business process outsourcing (BPO), knowledge process outsourcing (KPO), drug research and clinical research outsourcing (CRO), engineering services outsourcing (ESO), software and solutions related to the consumer Internet, software as a service (SAAS), open source, software-cum-services, and telecommunications (both wireless and wire-line) products and services. This combined group of products and services is expected to grow at approximately 22% per year during the next five years and is likely to contribute about 1.3% out of a total nominal growth of 13% per year (including 5% annual inflation), i.e., approximately 10% of the total growth of the Indian economy. […]
Eyeing a chunk of the India pie, venture capitalists and private equity players will strike deals worth $17.5 billion (Rs 70,000 crore) by 2009. This is a three-fold jump from $5.5 billion at the end of the first half in 2007, predicts a new study from market research firm Evalueserve. Consequently, the total number of deals would soar to 560 as private equity players put in funds into the new engines of growth that drive the Indian economy. The paper mentions that 173 deals have been struck by the end of the first half of 2007. Evalueserve forecasts that beyond the technology-sector focused activity that has driven PE investments in the past, private equity and venture capital firms are now aggressively looking to invest in new areas such as manufacturing, financial services, healthcare, real estate, and construction. […]
Worried over the substantial inflows of foreign funds into the real estate sector, the central bank has asked the government to allow FDI into the sector only after the clearance from Foreign Investment Promotion Board (FIPB). At present, up to 100% FDI is allowed in realty projects on automatic route with certain conditions like a three-year lock-in on investments and minimum capitalisation of $5 million. RBI wants real estate removed from the list of sectors where FDI can come in through the automatic route. RBI wants inflows routes like participatory notes (P-notes) and private equity contained. The market regulator Sebi is currently in the process of initiating moves to restrict investments coming in through P-notes. Sources said the government, which has completely backed Sebi’s action to restrict P-note flows, may now not relent on other suggestions, especially restricting FDI. Also removing one sector from the automatic list, will be seen as a retrograde measure by foreign investors. […]
Mergers and acquisitions volume in India's banking space increased significantly to USD10.5 billion in the year so far, gathering momentum from the government picking up a majority stake in the country's largest lender SBI (USD 8.7 Bn deal), a report says. The banking M&As volume increased to $ 10.5 billion through 38 deals during the year so far, while the sector had witnessed 23 deals worth 707 million last year, according to a report by global data provider Dealogic. Banking M&As tally soared mainly due to the $ 8.7-billion acquisition of 59.73 per cent stake in State Bank of India by the Centre. The stake was bought from the Reserve Bank in June. Globally, banking M&As volume has increased to $ 369.5 billion through 853 deals during the year so far, up 18 per cent from $ 313 billion in 858 deals in the same period last fiscal. […]
Private Equity (PE) investments in the domestic healthcare and pharma industry have touched around $400 million during the first nine months of the year. This trend is set to accelerate as companies go for overseas acquisitions, hive off their R&D units, and Foreign Currency Convertible Bonds (FCCB) lose their sheen. The PE investment include Apax Partners’ $104 million fund infusion in Apollo Hospitals, IFC’s $67 million in Max Healthcare, Trinity Capital’s $31.4 million in Fortis Healthcare, ChrysCapital’s $24 million in Mankind Pharma and Kotak $10 million in Intas Biopharmaceuticals. Says Apollo Health Street MD Sangita Reddy: “We had two investments from foreign investors recently and we are being continuously approached by financial institutions. The lack of investment in the healthcare sector so far may be because there are few players, and the capability of the sector has not be fully highlighted. But we see the number of investment from PE firms to increase soon.” (Apollo Health Street is part of the Apollo Hospitals group.) […]
Measures targeted at managing surging capital inflows. The Reserve Bank of India (RBI) has recommended to the finance ministry a series of measures to curb investment flows from venture funds and into real estate. These measures are expected to help check part of the huge inflows of foreign capital, particularly since the last week of July, and plug loopholes in foreign investment norms. Among the recommendations, RBI has suggested restrictions on investments by venture capital funds in sectors that are already developed and booming. The central bank has also suggested that FDI in real estate be brought under the approval route — such investment is currently under the automatic route. The RBI has suggested that there should be end-use restrictions for investments by foreign venture capital funds. It has said that venture funds by definition should be investing in high-risk ventures in which entrepreneurs are unable to access capital and not in mature sectors like real estate. […]
Country's food processing industry, which is attracting the foreign investors, has received a record of 106.4 million euro (about Rs 600 crore) investments from private equity firms this year so far, a latest report says. The food and beverage sector which got PE investments of a mere 4.2 euro million in two deals last year, saw the funds soar to 106.4 million euro through 11 deals already this year, consultancy firm KPMG and industry chamber FICCI said in a joint report released here today. The report also said foreign direct investment (FDI) approvals in food processing sector more than doubled to 98 million dollar in 2006-07 from 42 million dollar in 2005-06. It also said the FDI in the F&B sector is likely to cross 2.1 billion euro in 2007-08. […]
State government-backed venture capital firms, once among the few sources of seed and early-stage capital for Indian start-ups before the current round of venture investing got under way less than two years ago, have started privatizing themselves in order to remain relevant in the changed environment. Their moves come ahead of a Rs1,500 crore fund-raising exercise—the largest aggregate corpus such funds have raised in the last 15 years. The new funds in the pipeline will see private asset management teams being brought in to invest and manage them. Some of this is already under way. Punjab Infotech Venture Fund (PIVF) and Kerala Venture Capital Fund (KVCF) have plans to privatize, while Hyderabad Information Technology Venture Enterprise Ltd (Hitvel), which is increasing its current fund corpus from Rs50 crore to Rs150 crore, recently entered into a partnership with Srei Infrastructure Finance Ltd. Srei holds a 76% stake in Hitvel. Other state government-backed outfits that are in fund-raising mode currently are those from Karnataka, Maharashtra, Rajasthan, Andhra Pradesh and Gujarat. The last two are pioneers in the public-private partnership model and have set the rules of the game. […]
With the Sensex touching stratospheric levels private equity (PE) investors are adopting a cautious approach towards investment in listed companies. With valuations of listed companies becoming steeper, deals in the unlisted space are likely to find favour with PE investors in the next few months, say PE majors. “At these valuations, some funds are likely to become cautious and may take a stand to be more circumspect. PE funds may reduce investments in public companies,” said the India head of a European PE fund. Though this year has witnessed record PE inflows in Indian companies, PE funds say the next few months are likely to see a slowdown in the number of deals. In the first seven months of 2007, India received more PE funding than both Singapore and Hong Kong markets put together. […]
|
Post your messages.Please refrain from posting offensive messages. IndiaPE accepts no liability for the consequences of your reliance on these postings and messages.
|