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| India attracts $3 bn PE investment in H1 2009 |
| Press Trust of India / New Delhi Aug 03, 2009, 17:48 IST |
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India witnessed a significant increase in private equity investments as transactions worth nearly three billion dollars (Rs 14,000 crore) were announced in the first half of this year, signalling a recovery in the economy, a report by Grant Thornton has said.
PE investments have already shown reasonable growth in the second quarter of 2009 compared to the previous quarter. Besides, the second quarter of 2009 has indicated several signs of recovery in the economy, which have led to an increase in the interest in M&A and PE, the report said.
The total number of PE deals announced during the first half of 2009 stood at 93 with a total announced value of $2.89 billion, it said.
Though this year's PE deal value for the first half of 2009 represented a 58 per cent drop over the corresponding period of previous year, but still there are visible signs of recovery as the deal volume in Q2 2009 is showing signs of improvement when compared with the previous quarter, the report said.
Harish H V, partner at Grant Thornton, said: "The indications of recovery combined with an increased availability of finance seem to have increased the appetite of India Inc for M&A and PE investments."
Going forward, the investment prospects in this segment look bright as more than 74 per cent of private equity respondents believed that non-cyclical sectors such as healthcare, including pharmaceuticals, hospitals, diagnostic centres and services would drive PE deals over the next 12 months, the report said.
The reason behind this uptrend is that the improvement in sentiments and positive initiatives from the government was backed by real statistics of good quarterly performance Indian corporates and more importantly in several core sectors such as coal, cement and steel among others which have posted growth in revenues and profitability, it said.
The highest proportion of PE/VC investment in terms of announced value in the first half of this year was made in the real estate and infrastructure management, shipping and ports and telecom sectors with an investment of $1.61 billion, $161 million and $129 million, respectively.
Together, the three segments accounted for over 66 per cent of PE investment made in India during H1 2009.
The top five PE deals accounted for more than 43 per cent of the total PE deal value in H1 2009.
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