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The appetite to absorb these funds in India is growing given the fact that $3.3 billion was invested here across close to 100 deals during the first three months of 2008, showing a growth of 22 per cent over the corresponding period of 2007.
“Despite the turmoil in the global financial markets, PE investments during this period registered a growth over the corresponding period in 2007 thanks to a spurt in deals in the ‘late stage' segment which accounted for 60 per cent of the amount invested,” noted Arun Natarajan, Founder & CEO of Venture Intelligence, a venture research firm. “While the steep decline in public markets is leading Indian companies to adopt a wait-and-watch stance vis-à-vis their fund-raising plans, in the medium term, the correction is likely to favour private equity emerging as an attractive alternative,” he added. In the recent past, global VC funds such as Lightspeed Ventures, Qualcomm Ventures, Capital International, Baring Asia have started to aggressively focus on Indian companies. “At a time when highly leveraged US and European buyouts are starting to show signs of stress, private equity funds focussed on growth investing in Asia, a strategy which largely does not use financial leverage, are continuing to attract interest from around the world,” said Jean Eric Salata, Hong Kong-based founding partner and CEO of Baring Asia, after announcing a $1.5 billion Asia-focussed PE fund. “We could have raised substantially more capital, but we decided to size the fund to enable us to target mid-sized growth equity deals, which in our opinion is where the best investment opportunities are today, particularly in India,” added Gordon Shaw, Managing Director, Baring Asia. While the technology VCs continue to be active on the landscape, growth stage infrastructure and sector agnostic funds too are gaining significant ground. While IDFC Private Equity is targeting a $600 million third fund, IL&FS Investment Managers are closing in on a $400 million fund to invest across sectors. In addition to this, Baring Private Equity Partners is understood to be tying up ends for their $400 million India fund. Added Karthee Madasamy, senior investment manager and head of India investments, Qualcomm Ventures: “We are actively considering opportunities in the Indian wireless and semiconductor market and are looking at startup companies that focus on the growing Indian consumer and enterprise market. With full-time presence in Bangalore, we are committed to the Indian venture ecosystem.” |
Source: Business Standard