Apr-Jun qtr: India PE investment slows

The first quarter of 2012 had seen 103 transactions worth USD 2.05 billion.

Private equity activity in India continued to slow down as PE investment slumped by around 34 per cent to USD 1.84 billion (over Rs 10,000 crore) in the April-June quarter.

This was the fourth consecutive quarter of deceleration in PE investments. The first quarter this year had seen 103 transactions worth USD 2.05 billion.

According to the study by Venture Intelligence,a research service focused on PE and merger and acquisition activity in India,”Private equity firms invested about USD 1.84 billion during the quarter ended June 2012. The investment amount was 34 per cent less than USD 2.79 billion invested in the same period last year.”

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Besides,the number of deals also fell to 102 in the quarter under review from 126 in the year-ago period.

There has been a dearth of mega deals during the quarter,which was the main reason behind the decline in the overall PE deal activity.

The April-June quarter witnessed four investments worth over USD 100 million each,and none above USD 200 million,compared to 10 such deals in the same period last year. They included six transactions worth over USD 200 million.

IT and IT-enabled companies topped the list with total investment of USD 379 million during the April-June quarter.

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The sector accounted 21 per cent of the total value pie. It was followed by the energy sector,which attracted USD 299 million; healthcare and life sciences,243 million and BFSI (banking,Financial Services and Insurance) — USD 232 million.

As per the report,the largest PE deal during the June quarter was Morgan Stanley Infrastructure Partners’ investment of Rs 1,200 crore in Continuum Wind Energy,a Singapore-based developer of wind assets in India.

It was followed by Fairbridge Capital acquiring a 77 per cent stake in travel services firm Thomas Cook (India) for Rs 817.4 crore and Warburg Pincus’ acquisition of a 53.67 per cent stake in consumer finance company Future Capital Holdings for Rs 563 crore.

Meanwhile,PE-real estate firms made seven investments (amounting to USD 162 million across six deals with disclosed values) during the quarter ended June 2012.

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The largest PE-realty investment announced during the first quarter of this year was Morgan Stanley Real Estate Investment’s Rs 500 crore commitment to Supertech’s township project in Noida.

Besides,Supertech also bagged a Rs 100 crore commitment from the US-based Walton Street Capital towards the residential towers.