PE funds look for projects

The private equity (PE) space is likely to see an increased activity in the coming days, as several PE firms are planning new investments.

However, several PE firms feel that there will be some slowdown in deal making.

Speaking on the sidelines of a seminar on PE funding in Kolkata on Monday, Gopal Srinivasan, chairman, TVS Capital Funds, said TVS Capital had raised close to Rs 600 crore, invested Rs 20 crore and lined up another rs 100 crore investment.

The company invested in retail, social infrastructure, media and entertainment.

"It is the right time to invest in quality assets of distressed sellers," said Srinivasan.

Gaurav Mathur, managing director, India Equity Partners, said it was in talks with diversified business houses to buy out smaller group companies.

Mathur said several business conglomerates were finding difficult to raise money for running core operations and were now willing to sell off majority stakes in some group companies to raise funds for others.

"This is a new development after the liquidity crunch happened. Now large business houses are approaching the private equity players to divest 51 per cent or more of their holdings in small group outfits as they are not getting bank finance these days," he said.

Mathur said IEP had so far raised $2.1 billion for investing in the Indian market of which $1.4 billion have already been committed.

"We are currently sitting on about $800 million cash and looking for right investment avenues," Mathur said.

The PE fund was looking at opportunities in sectors like education, specialised healthcare services, nursing homes, social infrastructure, water and waste management.

George Thomas, managing partner of Indian Value Fund (IVF), said, “The company was at present working on raising its fourth fund, which might be in the range of Rs $700-800 million and ue to be completed by March this year.”

He claimed funding a transaction was not a constraint in India but IVF would like to focus on segments like healthcare or media or entertainment.

Tata Capital would float a $250 million PE fund in the next few months.

According to investors, the ticket size of deals were likely to fall this year. Average deal size was $33.93 mn in 2008, lower than $46.99 mn in 2007.