India has emerged the third largest destination for private equity in the Asia-Pacific region in 2007, next only to Australia and Taiwan, both in terms of value and volume of transactions. According to data compiled by research outfit Thomson Financial, PE investments in India during the year have touched $2.49 billion, as against $1.05 billion in Hong Kong , $1.47 billion in Singapore and $752.2 million for the Chinese market. The total PE funding in India is nearly equal to the PE funding that has come into Hong Kong and Singapore together. “The trend of India witnessing higher levels of PE funding than its Asian peers is just a reflection of its growing importance in the global economy. Going forward, we can expect continued buoyancy in both these markets as investors start seeing returns in the backdrop of abundance of high growth opportunities. However, with investors having figured out ways to secure exits from Chinese investments, China may just gain an edge over India,” said Srinivas Baratam, Director, UTI Ventures According to Thomson Financial , 29 PE deals have been struck in India this year, next only to Australia (67) in the entire Asia Pacific region. Though there were 28 PE deals in China, the size of the deals were much smaller. While the average size of the deals in India is $85 million, the deal size in China was only $26 million and $188 million for Australia. India is also a hot-bed for strategic buys, which include M&A activities, with $29.74 billion worth of strategic deals being struck, again the third highest in the Asia Pacific region. While Australia leads the pack with $76.07 billion of strategic deals, China reported $36.88 billion of such deals. There were a total of 331 M&A deals worth $44.34 billion in India in the first seven months of 2007, as compared to 328 M&A deals worth $10.36 billion in 2006. […]

The Bombay Stock Exchange may have well begun to realise the importance of real estate sector and introduced the realty index, but venture capital investors have been moving away from the realty by trimming allocations to the sector by 31% since the beginning of the year. Venture Capital Funds (VCF) and Foreign Venture Capital (FVC) investors have been realigning their investments by reducing inflows into real estate, information technology, telecom and industrial products sectors. In contrast, investments have been piling up in the services, media and entertainment, biotechnology and pharma sectors. However, the total investments in the country have shot up by 67% to Rs 20,310 crore as on June 30, 2007, from Rs 12,127 crore as on September 30, 2006, according to data from Securities and Exchange Board of India (Sebi) on 88 VCFs and 66 FVC investors registered with the regulator. […]

India Inc may have to wait a while before concluding a cross-border acquisition as big as the Tata-Corus deal. Leveraged buyouts, which helped Indian companies to raise finances for global takeovers, are heading for a slowdown, triggering sale of equities in global markets. In a leveraged buyout the acquisition of a company is financed significantly by money borrowed against its assets. Leveraged buyouts thus allow companies to make large acquisitions without having to commit a lot of capital. The Tatas managed to raise debt worth $6 billion–six times the earnings before tax, interest and depreciation (EBIDTA) of Corus–to finance the acquisition. But they may have to take another fund-raising route if they chose to acquire Land Rover and Jaguar from Ford. A liquidity crunch has forced global lenders to significantly scale down loans to 3-4 times the EBIDTA of the acquired company. […]