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Private Equity Investment in India

What does private equity mean?

Private equity investment in companies is made by investors (private equity firm, venture capital companies etc) who invest directly into companies. Common strategies in this space includes: leveraged buyouts, venture capital, growth capital and distressed investments.

Private Equity Investment in India reached U.S. $ 2,521 million with 97 deals in Q3’12. Private Equity investments have increased 32 % in terms of value and  8 % drop in volume, as compared to Q2 2012. In comparison with Q3 2011, there has been a 4 % increase in value and a drop of 20 % in the number of deals. Bain Capital Partners’ purchase of shares held by previous Private Equity investors – General Atlantic and Oak Hill Capital – in NYSE-listed, Gurgaon-based BPO firm Genpact for $1 billion was the largest Private Equity Investment in India during Q3’12. The second largest investment during the period was SBI-Macquarie’s $150 million investment in Ashoka Concessions Limited, a road-construction subsidiary of publicly-listed Ashoka Buildcon.

Private Equity Investment in India

 With 45 deals worth $ 1,295 million in Q3 ’12, the IT & ITeS sector was the leader in both value as well as volume. During this quarter, in terms of value, Private Equity investment in the sector increased by more than three times and showed a 7 % increase in volume as compared to the US$ 383 million investment from 42 deals in the previous quarter. This growth can be largely attributed to a single large deal between Bain Capital and Genpact, which alone accounted for 40 % of the deal value for the quarter.

Private Equity investment in the manufacturing sector also showed growth of over seven times in value and a 60 % growth in volume—$ 215 million from 8 deals in this quarter as compared to an investment of $ 32 million from 5 deals in the previous quarter. Sectors such as Healthcare & Life Sciences, Shipping & Logistics and Energy have all seen a drop in Private Equity investment this quarter. The opening up of the multi-brand retail sector to foreign investors is expected to generate substantial investments over a period of time. 

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