PE investment slows down to $500 mn in Jan: E&Y

Private equity investment slowed down to $500 million in January over the previous month, says a report by Ernst & Young.

Infrastructure companies, however, attracted a major chunk of the PE investment in January, which was lower by 9% over about $550 million in December last year, the report said.

"There has been a marginal decline in the aggregate investments during the month compared to last month, but activity remains robust compared to January 2010," E&Y Partner (Private Equity) Mayank Rastogi told PTI.

The total PE investment in January 2010 was $380 million.

However, the total number of deals announced during the month was higher than that in both the previous month and January 2010.

In January this year, 28 PE deals were announced, against 26 deals in December and 16 in the same month last year.

While infrastructure and retail and consumer products saw maximum number of PE deals (6 each), media and entertainment attracted two such deals, the report added.

"In terms of sectors, infrastructure remained clear favourite. Power (companies) attracted maximum volume driven by demand-supply mismatch theme in the Indian power sector," Rastogi added.

According to E&Y the largest PE funding during the month was Macquarie SBI Infrastructure's $130 million investment in thermal power project of Moser Baer Power Projects.

During 2010, private equity firms invested $7.97 billion in Indian companies, almost double than that of the previous year.

Experts believe buoyed by sound economic growth and rising domestic demand, private equity players would increase their investments in the country.