PE deals zooms seven-fold to over $1 bn in Aug

Private equity firms have invested over $1 billion in Indian companies in August, more than seven per cent from the year-ago period, with investors increased preference towards telecom and financial services sector.

"Total private equity (PE) investment in India grew 7.5 times to $1.3 billion as against $179 million in August 2009," according to data compiled by deal space research firm VCCEdge.

While comparing from July, deal value in August was up 60 per cent due to some large deals during the month.

"August 2009 had seen the lowest monthly deal value since the beginning of 2009, with the exception of March' 09 which was at $136 million. Since then an upward trend has been witnessed with deal value peaking during August 2010, suggesting a recovery from last years slowdown," the report noted.

Upturn was also witnessed in terms of the number of deals recorded in the last month. In August this year 35 PE transactions were posted, against 24 deals registered in same period in 2009.

As many as 35 companies saw PE investment pouring during the period, while PE firms made an exit from 18 other companies.

PE firms generally exit from their investment through buyback of shares by promoters, open market transactions, merger and acquisitions and public offers.

During the month, industrial, telecom and finance were the most targeted sectors for investment with deals valued $309 million, $304 million and $298 million respectively.

Two of the largest investments in the month were made by Macquarie-SBI Infrastructure Fund. It invested $304 million in Viom Networks and $200 million in GMR Airports Holding. Besides, other large deals include the $290 million investment made by Blackstone Advisors in Moser Baer Projects.

At the same time, there were 18 exits worth $249 million in August 2010. These included private equity firms-- Kubera Cross Border Fund Ltd, Walden International, Global Internet Ventures-- $100 million exit from Venture Infotek Global and Citi Venture that exited its investment in Emaar MGF Land Ltd.