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The lion's share of private equity funds targeted at emerging markets goes to faster growth countries like India and China, with the two Asian giants cornering 68 per cent of the total invested value, says a study by the Emerging Markets Private Equity Association. According to the EMPEA, which manages a global proprietary database of private equity activity across emerging markets, “China and India together captured 68 per cent of the total invested, with USD 5.8 billion going into China and USD 3.8 billion into India.” Calculated on this basis, private equity investments in emerging market economies totalled a little over USD 14 billion in the first six months of this year. Moreover, India and China account for 54 per cent of the total number of completed PE transactions in the January-June period this year. China accounted for 136 completed transactions, compared to 142 in the case of India. […]
Private equity (PE) investments into India have risen by around 22 per cent in 2011 till date over the corresponding period of last year, to $7,160 million (Rs 32,220 crore), and the number of deals rose by around nine per cent. According to data compiled by Venture Intelligence, from January to August (till date), PE firms had invested this amount across 246 deals, compared to $5,831 mn (Rs 26,235 crore), across 226 deals in the same period in 2010. In 2011, investments were led by manufacturing ($1,398 mn across 22 deals), followed by information technology and IT-enabled services ($1,029 mn, 70 deals), engineering and construction ($796 mn, 16 deals), BFSI (banking, financial services and insurance, $790 mn, 24 deals), energy ($684 mn, 19 deals), food & beverages ($275 mn, 10 deals), health care & life sciences ($186 mn, 15 deals), other services ($137 mn, 11 deals), education ($93 mn, 10 deals) and textiles and garments ($80 mn, eight deals). […]
Diminishing share prices of listed companies have hit the portfolios of the largest private equity majors such as Blackstone, Carlyle and Warburg Pincus. Following the recent market crash, the investments they had made in the past have declined drastically, by 70-80 per cent. However, experts believe transactions in the listed space are likely to go up as the typical fundraising sources dry up, leaving enough room for more PIPE (private investments in public equities) transactions. Blackstone, one of the largest global PE players, bore the brunt of a decline in stocks listed on Indian bourses. Its investments in Gokaldas Exports shrank 70 per cent. It had invested $158 million in 2007 to acquire 67.88 per cent stake in Gokaldas. Shares of Gokaldas, bought by Blackstone for Rs 275 apiece, touched their 52-week low of Rs 70 on the Bombay Stock Exchange (BSE) on Friday. Mayank Rastogi, partner (private equity), E&Y, said: “The LPs (limited partners) are mature enough to discount the spikes and troughs. If the delta between the market price and the potential deal price is large, fund managers will need to have a solid rationale for their investment committees/LPs to give higher value.” […]
India's new takeover rules spell different things to a varied class of stakeholders. For promoters with low holdings, it could mean buying more shares to bolster their holdings to shield themselves from a potential hostile bid. Institutional investors, mainly private equity funds, will now be able to acquire up to a 24.99% stake in a company, without triggering an open offer. Retail investors, too, should gain with the removal of non-compete fees and greater participation in open offers. Late last month, the Securities and Exchange Board of India, or Sebi, proposed to amend the 13-year-old takeover rules and said that an acquirer can buy up to 25% in a listed firm without triggering a public offer. The offer size, too, was changed to 26%, providing an exit for more investors. That is a marked change from the scenario now when an acquirer has to make an open offer to buy out an additional stake of 20% from public shareholders once the holding tops 15%. […]
Private equity funds, which mostly invest in unlisted companies, are buying more shares in listed firms trading at attractive prices on the bourses. The downturn in stock markets in the past few months has brought down valuations of companies throwing up significant investment opportunities for PE firms to invest in listed enterprises, termed as PIPE deals. […]
has signalled its determination to tighten its grip on the sector. Since January, PE firms have invested $200 million (around Rs. 890 crore today) in six NBFCs and more such deals are in the offing, said fund managers. Baring Private Equity Partners India Pvt. Ltd, which invested in Muthoot Finance Ltd last July, is scouting for more NBFCs in which it can invest. “We are still looking for other opportunities to invest in this sector,” said Munish Dayal, partner at Baring Private Equity Partners. He added that several NBFCs that received a first round of funding will need a fresh round of capital in the next two-three years. Dhanpal Jhaveri, partner and chief executive officer of PE fund Everstone Capital Management, also sees a huge opportunity in the sector. “Sophistication of the credit markets and financial inclusion strategies are two drivers for growing PE interest in NBFCs,” he said. […]
Private equity firms, which have typically relied on banks, insurers and retail investors to raise money, now have a new source to tap—family offices, or independent companies formed to manage the wealth of families, usually through investments. A number of family offices have been formed in India over the past two to three years as successful business families have looked to diversify their portfolios. A single-family office is dedicated to one family, while a multi-family office serves several. Altamount Capital Management Pvt. Ltd, Evergreen Family Office and Metis Family Office Services Pvt. Ltd are some examples of multi-family offices. Banks such as Kotak Mahindra Bank Ltdand Barclays Capital, and financial services firms, including Edelweiss Capital Ltd, have also set up family offices. […]
Several Indian budget and midrange hotel chains are scouting for private equity money to fuel growth and expansion. Global and domestic investors are optimistic about India's emerging branded budget hotels, though the overall hospitality sector is yet to recover from the downturn of 2008-09, analysts said. “It wouldn't be difficult to raise money because for investors, India is one of the largest target markets for budget hotels,” said Akshay Kulkarni, executive director, hospitality services, Cushman and Wakefield India, a property advisory. Peppermint Hotels is preparing to boost its valuation before raising funds. […]
Private equity investments jumped to $5.8 billion in the first six months of 2011, driven by higher number of large-size transactions as well as increased activities in the infrastructure space, says E&Y. With capital markets remaining sluggish, more and more investors seem to be preferring the PE route to raise funds. According to global consultancy Ernst & Young , PE deal value in the six months ended June climbed 34 per cent to $5.8 billion as compared to same period a year ago. “The increase in aggregate deal value was largely driven by greater number of large deals (deals over USD 100 million). […]
Paras Pharma founder Girish Patel, who exited his business in a blockbuster deal with Reckitt Benckiser, has jumped on to the private equity bandwagon in a trend of successful entrepreneurs setting aside their wealth to invest into small- and medium-size enterprises. And some of the cash-rich India Inc promoters are rolling up sleeves to be active investor managers in the new growth firms. Patel, 51, has JV capital fund Access India Advantage as operating partner after he mopped up Rs 1,000 crore selling 30% stake in Paras last year. […]
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