PE firms invest $2 billion in Q4

Private equity (PE) firms invested about $2 billion (around Rs 8,890 crore), the highest in the last six quarters, across 56 deals during the March quarter, according to a study by Venture Intelligence, a research service focused on private equity and M&A transaction activity in India.

While the corresponding quarter in the previous year saw investments worth $620 million across 58 deals, the preceding quarter witnessed investments worth $1,681 million across 102 deals.

The largest investment during the March quarter was the $425 million (around Rs 1,900 crore) investment into power generation firm Asian Genco by General Atlantic, Morgan Stanley, Norwest, Goldman Sachs and Everstone.

Other top investments reported during the quarter included Quadrangle Capital Partners’ $300 million (around Rs 1,350 crore) investment into telecom tower infrastructure company TowerVision India; StanChart PE, KKR and New Silk Route’s $217 million (around Rs 976 crore) investment into Coffee Day Resorts and TPG Growth’s $115 million (around Rs 517 crore) investment into Clean Tech firm Greenko Group.

“The key trend on the PE investments front during the first quarter of 2010 was the re-emergence of appetite for large ticket deals. For the first time since the third quarter of 2008, the latest quarter witnessed as may as five investments over $100 million,” said Arun Natarajan, MD & CEO of Venture Intelligence.

Led by Actis’ $50 million (around Rs 225 crore) investment into BPO company Integreon Managed Solutions, the IT & ITES industry registered 13 deals worth $193 million during the quarter, followed by the BFSI sector (nine deals worth $94 million).

Venture Capital and late stage investments accounted for 16 and 18 deals, respectively during the quarter. “Instead of rushing after listed company and pre-IPO deals, investors showed special preference during the first quarter of 2010 for slightly younger companies with median sizes of about $11 million,” Natarajan said.

Private Equity firms obtained exit routes for their investments in 32 Indian companies during the first quarter of 2010, including six via IPOs. This compares to 16 exits (none via IPOs) in the same period in 2009 and 20 exits (including four IPOs) in the immediate previous quarter.