Destination India for private equity funds
SRIKUMAR BONDYOPADHYAY
THE TELEGRAPH (Calcutta)
Calcutta, Feb. 18: India overtook China and Singapore to become the largest recipient of private equity and venture capital in 2006 among the Asia-Pacific countries, excluding Japan.
India attracted $2.21 billion of private equity investment in 2006, a record for an Asian country, according to a private equity market report by Thomson Financial for Asia-Pacific region (except Japan).
“The year 2006 was certainly a milestone for India as it climbed from the fourth place last year to the top of the table,” the report stated.
Private equity investments in the Asia-Pacific region (excluding Japan but including Australia) reached record volumes of $7.62 billion in 2006. “This figure represented the highest investment made in the region since 2000, when $10.3 billion of private equity investment was made,” the report added.
India was followed by China with $1.72 billion. Singapore came third with $1.53 billion. About 88 private equity "investors put in $2.21 billion in 126 Indian companies in 2006, while 110 private equity and venture capitalist firms invested $1.72 billion in 129 Chinese companies.
However, the top two recipient companies, namely Asia Capital Holdings ($620 million), a reinsurer, and Fraser & Neave ($583 million), a food and beverage manufacturer, were from Singapore.
The report also found that US firms led the investment in Asia-Pacific countries. “Companies in the expansion stage attracted maximum private equity investment in 2006 reaching $2.2 billion, accounting for 28.5 per cent of total private equity investment,” said the report.
“Compared with the traditional seed and early stage funding that private equity investors and venture capitalists provide in other markets such as the US and Europe, Indian investments have been mostly late stage funding and private investments in public enterprises,” said a private equity investment study in India by PriceWaterhouseCoopers.
The pre-IPO funding space has also seen significant deals over the last year, though they have slowed down during the third quarter of 2006. Funds raised by Indian companies through private placement in 2006 were higher than in 2005. About 418 companies raised Rs 86,917 crore through private placement between April and December last year.
Also see: "Private Equity Invades India", ThePittsburghChannel.com
http://www.thepittsburghchannel.com/money/10629456/detail.html
"As India's economy continues to open up, private-equity investors are starting to diversify away from telecommunications and outsourcing. These days, health care, food, real estate, travel, and more are heating up. In addition to Coffee Day, for instance, Sequoia has plowed money into a rental-car company, a hotel chain, and a Web portal that helps arrange marriages. Says Sequoia India chief Sumir Chadha: "Investors are focusing on building companies [that have] Indian demand."