US-based private equity fund Carlyle has made the highest PE investments in India in the first seven months of 2007. Its total investment of $416 million is the highest by any single PE investor, followed by Morgan Stanley and IL&FS realty fund. Carlyle invested this amount in a single deal — it invested in HDFC for 5.6% stake — through the Carlyle Asia Partners II fund.
According to data compiled by research outfit Thomson Financial, Morgan Stanley Private Equity Asia invested $152 million while IL&FS realty fund invested $100 million.
In the numbers game, Citigroup Venture Capital (CVC), IDFC Private Equity and Warburg Pincus occupy the No. 1 slot. The threesome signed four PE deals each in the first seven months. Home-grown PE fund ICICI Venture, through its India Advantage Fund V, made three investments worth $64 million.
“Carlyle wants to be a scale player in every market and we are glad that we have made a large-sized investment in a remarkable Indian institution like HDFC,” said Rajeev Gupta, MD and the head of India Buyout Group, Carlyle.
In 2006, Warburg Pincus made the highest investment — $136 million — in India. Newbridge and Olympus Capital were the other funds which put in large sums of money into the country last year.
In the first seven months of 2007, the top ten PE funds invested $1.08 billion – a little less than half of the total PE flow of $2.49 billion, says Thomson Financial data.
While the top three funds (Carlyle, Morgan Stanley and IL&FS) have done one deal each, CVC, through its CVC International Growth Partnership I fund has struck 4 deals, the same as Warburg Pincus. IDFC Private equity through its second fund, has also closed 4 deals worth $52.08 million.
While most investments have been made in private companies, Carlyle’s HDFC transaction is in a public company, suggesting that big deals in India will continue to be PIPE (private investment in public enterprises) transactions.
“PE funds will come but most deals will continue to be in the PIPE space. PE investment in unlisted companies will be few in number,’’ said Mahesh Chhabria, director- growth capital, 3i India.
Morgan Stanley invested in Oberoi Constructions, IL&FS Real estate invested in QVC Realty and IDFC invested in Quipo Infrastructure.
The private equity juggernaut has been growing at a fast pace in India in the last two years. However the figures varies. While Thomson Financial says that Indian companies received PE funds worth $1.6 billion in 2006, accounting firm Grant Thornton quotes the figure as 7.5 billion.
The figures are also different for the first half of 2007. While Grant Thornton says $5.7 billion of PE deals were signed in India, Thomson Financial says it is $2.49 billion.
Source: Economic Times