PE investment in India up two-fold to $2.3 bn

Witnessing a strong growth, private equity investment in India rose to $2.3 billion in the April-June quarter, taking the total PE inflows so far this year to $4.29 billion, says a report.

According to the monthly report of VCCEdge, the financial platform of VCCircle.com, private equity deals amounted to $2.3 billion in the second quarter of the 2010-11 calendar year against $990 million in the year-ago period.

An upturn was also witnessed in terms of the number of deals recorded in the said period. In the second quarter of this year, 24 PE transactions were effected, against 15 deals in the same period of 2009, the report added.

"Private equity investments in India continued to display steady signs of recovery in the second quarter of 2010. Deal value continued to increase for the sixth consecutive quarter and is nearly 3.5 times the value seen in Q1, 2009," the report said.

The first two quarters of 2010 witnessed PE deals worth $4.29 billion compared to $4.32 billion in the entire 2009-10 calendar year.

PE transactions worth $50 million and above accounted for 63 per cent of the total capital invested during the quarter under review.

The largest PE transaction during the April-June period was Olympus Capital's $300 million investment in Tata Power's special purpose vehicle for developing Indonesian coal mines, followed by Temasek Holdings's $200 million investment in GMR Energy.

Another major deal was Temasek's acquisition of a 5 per cent stake in the National Stock Exchange for $175 million.

A sector-wise analysis shows that finance, energy and utilities were the most targeted sectors for investment, with deals worth $510 million, $320 million and $306 million, respectively.

In terms of the number of deals, the most active sectors were finance, consumer discretionary and information technology.

The top five deals accounted for nearly 42 per cent of the total value of private equity deals in the second quarter of 2010.