The turmoil in the stock markets is showing. The private equity (PE) investors who were considered the step-through in the investment chain are cooling their investments. Worse still, the feeling is that this may continue in the following quarters.
Venture Intelligence, a research firm focused on PE and VC investments, said in a statement, that during January-March 2008 quarter investments worth $3.30 billion across 97 deals were completed.
However, on a sequential basis, during the October-December quarter, 131 deals saw as much as $5 billion invested. For the corresponding quarter January-March 2007 though $2.70 billion got invested in 101 entities.
The largest investment in the January-March quarter was the $395 million raised by Sophia Power Company, a part of the Indiabulls Group, from Lakshmi Mittal-promoted LNM India Ventures and Farallon Capital.
Besides, Kohlberg Kravis Roberts (KKR) invested around $250 million in telecom tower company Bharti Infratel while Morgan Stanley picked up stakes in another telecom infrastructure company – TowerVision by investing around $300 million.
Other deals in excess of $100 million were fund raising exercises by Cairn India, Ballarpur Paper Holdings, travel technology firm InterGlobe Technology Quotient and hospital firm Narayana Hrudayalaya.
Subbu Subramaniam, Partner of Barings Private Equity Partners (BPEP) told The Times of India that globally as well as in India, the overall allocation for private equity would come down in the weeks. “Clearly the lag effect will be more visible in the coming quarter or two,' he said.
Most companies are adopting a wait-and-watch attitude towards fund raising.
Source: Times of India