PE investments decline 28% to $1.94 bn in Apr-Jun qtr

Private equity (PE) investments in the April-June quarter dropped 28% to $1.94 billion due to various uncertainties including those related to the new companies law, says a report.

During the April-June period of 2014, PE firms invested $1.94 billion across 88 deals as compared to $2.69 billion through 114 transactions in the same period last year, according to a quarterly study by Venture Intelligence.

In January-March quarter, private equity firms invested $2.43 billion via 109 deals.

General elections and uncertainties over the new Companies Act led to slide in investments, the report said.

According to the report, e-commerce, pharma companies attracted dominant share of private equity investments in the second quarter of the calender year 2014.

There were four PE investments worth atleast $100 million in April-June quarter of 2014 compared to eight such transactions in the same period last year.

"With national election results out only in the last month of the quarter and the new rules imposed by the New Companies Act delaying a few deal closures, investors squeezed through bets on 'safe sectors' in second quarter of 2014," the report said.

E-commerce leader Flipkart's latest round of investments totalling $210 million led by Russia-based DST Global - was the largest PE investment announced during the quarter. Flipkart, which has been attracting new investors from around the world into India regularly over the last couple of years, has now raised $750 million in total.

The next two largest transactions were in the pharma sector and involved investors who have been operating in India for more than a decade --Temasek and Warburg Pincus.

While Temasek paid a reported $170 million to buyout fellow PE investor ChrysCapital from Intas Pharma, Warburg Pincus committed to invest $150 million in Laurus Labs including by buying out the stake held by previous investor Fidelity Growth Partners India.

Led by these mega deals, the information technology (IT), IT enabled services, healthcare and life sciences segments accounted for 67% of the investment pie during the period, the report showed.