Venture Capital firms invested $158 million in over 26 deals in the country during the three months ending June 2008, according to a study by Venture Intelligence.
The study done in partnership with the US-India Venture Capital Association reveals that during the first six months of 2008 investments of $340 million across 51 investments were completed. “VC investment activity as well as amounts invested during the first half of 2008 has not been affected much by the turmoil in the global
financial markets,” said Arun Natarajan, CEO of Venture Intelligence.
“While IT companies continue to account for a majority of investments, it is quite significant that the proportion of non-IT investments – both by activity and value – has now climbed up to 40%. VC investments are increasingly focusing on alternative energy, media, retail and other consumer demand-led sectors,” Natarajan added.
On the private equity side, various PE funds invested about US$2.8 billion in 77 Indian companies during the quarter ended June 2008. The amount invested during the quarter was higher than that during the same period last year (which witnessed 74 deals totalling $1.9 billion) but significantly lower compared to the immediate previous quarter (which witnessed 115 deals totalling $3.6 billion).
The latest numbers take the total investments in the first six months of 2008 to over $6.3 billion as against the $5.4 billion invested during the corresponding period in 2007.
The report said that the largest investment reported during Q2 '08 was the $640 million raised by Aditya Birla Telecom (ABTL), a subsidiary of listed mobile telephone services provider Idea Cellular, from Providence Equity Partners. “The steep fall in the public markets has resulted in a marked decline in the number of PIPE, Pre-initial public offering and late stage investments during the latest quarter,” said Natarajan.
“There has been a significant drying up of investments in the BFSI and engineering and construction sectors compared to last year. While power and telecom companies continue to attract large ticket investments, the positive surprise this year has been the re-emergence of healthcare and life sciences on the radar screens of PE investors,” he added.
The April-June quarter also saw more than $2 billion being raised for PE investments in India, with a substantial portion accounted for by infrastructure-focused offerings from 3i and Axis Bank. “We are continuing to see strong fund raising activity for the infrastructure sector with SBI and Macquarie launching a $2 billion fund this quarter on the heels of funds from IDFC PE and ICICI Venture,” he said.
Source: Times of India