Private Equity firms invested about $2,330 million across 82 deals during the quarter ended June 2013, an increase of around 17.7% compared to same period last year, during which there was $1,980 million investment across 114 transactions.
The second quarter flow was almost 2.3 times higher than that invested during the immediate previous quarter, which reported $1,021 million across 80 transactions.
The data doesnot include real estate sector and the $1,260 million investment by Qatar Foundation in publicly listed Bharti Airtel has been excluded for the purpose of this analysis.
According to Venture Intelligence, a Chennai-based research firm focused on private company financials, transactions and valuations in India, in the first six months of 2013 PE investments were $3,351 million (across 163 investments) down by 19.1% compared to the corresponding period of 2012 ($4,143 million across 238 investments).
There were seven PE investments worth over $100 million (with three above $200 million) during second quarter of 2013 compared to three such transactions in the same period last year and just one during the immediate previous quarter.
The top two PE transactions during the second quarter involved the buyout of existing PE investors by new ones: KKR’s $460 million acquisition of a majority stake in off-highway tires focused Alliance Tire Group (from fellow PE investor Warburg Pincus and the promoters) and the $270 million buyout by Partners Group of the existing PE investors in IT Services firm CSS Group (SAIF, Goldman Sachs and Sierra Ventures). Asia's $257 million investment in Lafarge India, the Indian subsidiary of French cement giant Lafarge, was the third largest in the period.
Apart from exiting CSS, the PE arm of global investment banking firm Goldman Sachs was also particularly active on the investing side during the quarter. Goldman invested an additional $135 million in existing portfolio company ReNew Wind Power; $110 million in listed cable TV firm Den Networks and $20 million in medical devices firm BPL Medical Technologies.
Data showed, led by the Alliance Tire and Lafarge India deals, manufacturing companies grabbed over a third of the PE investments (by value) in second quarter of 2013.
Manufacturing sector attracted $796 million across six investments and it was followed by IT & ITES, which attracted $453 million across 31 investments and Energy ($235 million across four investments).
Apart the CSS Group buyout, the top PE investments in IT & ITES companies included the $50 million follow-on round raised by e-commerce firm Snapdeal.com from a consortium of investors (led by strategic investor eBay and including new investors Intel Capital and Russia based RuNet Holdings) and the $25 million investment by TA Associates in Fractal Analytics. Among Energy deals, the ReNew Power deal was followed by the $90 million raised by NSL Renewable Power from a consortium including IFC, DEG, FE Clean Energy, ADB, Asia Clean Energy and Proparco.
VC type investments accounted for 49% of the investments during second quarter of 2013 (in volume terms) compared to 54% in the corresponding period a year ago. The share of Late Stage deals remained flat (at 24%), while the share of listed company investments showed tick up to 13% (from 11%).
Real estate sector
Private Equity-Real Estate firms made 13 investments (amounting to $318 million across 12 deals with disclosed values) during the quarter ended June 2013. The volume of investments perked up significantly from the seven investments in the same period in the previous year (which witnessed $172 million being invested across six transactions with disclosed values) and also the eight investments (worth $569 million) during the January-Mar 2013 quarter.
However, PE-RE investments in the first six months of 2013 at 21 transactions ($887 million across 20 deals with disclosed values) are still down 16% compared to the 25 investments in the corresponding period in 2012 ($659 million across 22 investments).
Ascendas Trust's Rs 600 crore (about $110 million) acquisition of 2 million sq ft of office space in Hyderabad from Phoenix Group was the largest investment during the second quarter. This was followed by Xander's Rs 280 crore ($52 million) investment in Supertech's 125 acre township project in Gurgaon and Clearwater Capital’s (along with Ajay Piramal Group non-banking financial company PHL Finance) Rs 300 crore ($50.2 million) investment to finance VGN Developers’ acquisition of a land parcel for a gated community project in Chennai.