PE investments touch $1.91 bn in Q3

Private equity investment in India touched $1.91 billion in July-September this year, which was 18% higher than that in the same period last year.

For the third quarter of 2011, PE deal values amounted to $1.91 billion, as against $1.71 billion in the same period last year, according to Grant Thornton's 'Dealtracker' report.

In terms of number, the July-September quarter saw 94 deals compared to 58 deals in the same period last year.

"Private equity investments during Q3 2011 have shown a marginal growth in value and a high growth in volume over the same period for the previous year," Grant Thornton India Partner and Practice Leader, Valuations, Srividya C G said.

The uptrend in the PE investment is in sharp contrast to the sluggish stock markets.

In comparison to $1.91 billion of PE investments in the third quarter this year, the capital raised through the initial public offer route during the said period stood at just $455.92 million through 11 IPOs, Grant Thornton said.

Experts believe that owing to the subdued stock markets, several companies that were looking to raise funds from public are now opting for the PE route.

Meanwhile, as per a report by SMC Global Securities, the ongoing volatility in the market has as many as 22 companies, with valid Sebi approval, cancelling their IPOs this fiscal. They include Reliance Infratel, Glenmark Generics, Gujarat State Petro Corp, Raheja Universal, Sterlite Energy, Jindal Power and Avantha Power.

The report, however, cautioned that a subdued IPO market might set panic in the mind of PE funds, who generally invest in unlisted companies in the hope of exiting through IPOs, as they will not be able to exit from their investments.

One97 communications, one of the firms which has deferred its IPO has PE investors like Intel, SVB India and SAIF Partners, while Micromax, which has also postponed its IPO plans boasts of PE investors like TA Associates, Sequoia, Sandstone Partners, Madison India Capital.