The Indian VC/PE juggernaut keeps rolling. VC/PE investments into the country in 2007 have touched $14.2 billion, almost double of what it clocked in 2006 at $7.5 billion.
The number of deals stood at 390 compared to 299 deals in 2006. The figure of $14.2 billion does not include Temasek’s investment of $1 billion in Bharti Infratel announced late in December 2007. It also excludes real estate investments.
According to Venture Intelligence India, which tracks VC/PE investments in India and compiles the data for Indian Venture Capital Association, VC investments (seed, early stage and growth capital) accounted for $560 million across 100 deals in 2007.
IT/ITeS accounted for 70% of the deals, healthcare & lifesciences 10% while other hot sectors were media, telecom, retail and food & beverages. The average deal size rose to $37 million in 2007 compared to $25 million in 2006.
VC investments’ contribution though has decreased to less than 5% from 35% of total investments the previous year. This is mainly due to the increase in mega deals (over $200 million investments) in 2007.
Arun Natarajan of Venture Intelligence said, “we saw eight mega deals in 2007 compared to four in 2006. These include the over $760-million investment by Carlyle and Citigroup, Dubai International Capital’s buying 2.87% stake in ICICI Bank and NSE’s stake sale to various investors like NYSE, Goldman Sachs, General Atlantic and Actis.”
The surge of mega deals in the financial sector has put BFSI sector as the numero uno segment as far as value goes accounting for about $4 billion in investments. However in terms of deals, BFSI was in third spot with 50 deals.
IT/ITeS ranked first in number of deals with 91 deals valued at $1 billion while manufacturing saw 60 deals with a value of $1.6 billion. It has to be said here that 70% of the IT/ITeS deals were VC investments.
Source: Economic Times