PE transactions in India rise three-fold to $840 mn in Apr

India emerged as one of private equity (PE) investors' favourite investment destinations in April, with the volume of transactions rising three-fold to $840 million in comparison to the same month last year, according to a study.

According to the monthly report of VCCEdge, the financial platform of VCCircle.Com, private equity deals in India amounted to $840 million in April, 2010, against $285 million in the corresponding period of the previous year.

An upturn was also witnessed in terms of the number of deals recorded during the said period. In April this year, 35 PE transactions were reported, against 22 deals registered in the same period in 2009, the report added.

However, the total value of PE deals reported in April was less than the quantum of investment made by these firms in March.

The report said, "On a month-on-month basis, deals value in April, 2010, was lower than that in March, 2010. The deal activity began with slow momentum in February, 2010... accelerated in March 2010. However, this pace could not be maintained and deal activity recorded a dip at $840 million in April, 2010."

India Inc. Recorded deals worth $455 million, $501 million and $972 million in January, February and March respectively.

PE transactions under $50 million accounted for 88 per cent of the total deal volume in April this year, while smaller deals ($50 million and below) accounted for 50 per cent of overall capital invested in the last month.

The largest PE deal in April was a $200 million investment in GMR Energy by Temasek Holdings, the private investment company owned by the government of Singapore. The Temasek-GMR Energy PE deal was followed by the investment made by Bain Capital Advisors India and TPG Capital in Lilliput Kidswear and Actis LLP's investment in TRIL Roads.

A sector-wise analysis showed that utilities, consumer discretionary (luxury goods) and industrials were the most targeted sectors for investment, with deals worth $201 million, $186 million and $160 million respectively in April, 2010.

In terms of deal volumes, the most active sectors were healthcare, finance and consumer discretionary.