PE investments in Oct at $326 mn, lowest in last 14 months

Private equity (PE) investment in October dipped significantly by 27 per cent to $326 million (around Rs 1,441 crore), the lowest monthly deal value over the last 14 months in the country.

According to data by research firm VCCedge, the total PE investment was $447 million in October 2009.

The momentum seen in private equity activity earlier this year seems to be on the downside, with September and October recording a steady decline from the heightened activity seen in the preceding four months of the year.

The first 10 months of 2010 have seen PE deal value at $7.57 billion as compared to $4.4 billion in the whole of 2009, the report added.

The highest private equity investment was witnessed in August this year when it stood at a whopping $1,349.04 million. The median deal amount and the average value of private equity deals in October 2010 was $10 million and $14 million, respectively.

A sector wise analysis showed that financials, industrials and utilities continued to attract significant PE investments, receiving capital to the tune of $90 million, $82 million and $72 million, respectively.

Together these three sectors — financials, industrials and utilities — accounted for 75 per cent of the total PE deal value during October this year.

In terms of deal numbers, the industrials sector witnessed the maximum number of PE deals (seven) in the month, closely followed by financials which attracted 6 transactions.

KKR’s $49 million investment in Avanta Power & Infrastructure Ltd for a nine per cent stake through pre-IPO was the biggest deal in October.

October also witnessed two mid-sized deals, valued at $34 million each, with Ascent India Fund III acquiring 11.62 million equity shares in IVRCL Assets & Holdings on a preferential basis, and Samara Capital Partners investing in Tamil Nadu-based mining company Thriveni Earthmovers.

Meanwhile, the merger and acquisition value in India in October was $1 billion, up from $650 million witnessed a year ago, the report added.