IT, textiles get biggest pieces in Q4

Private equity investments up 42 per cent during 2004-05

Information technology companies are set to top in terms of number of deals and the textiles sector is set to corner the most money from venture capital and private equity firms during the January-March 2005 quarter.

This is according to data from TSJ Media, which tracks VC investments in India and Indian-founded companies worldwide.

The private sector and VC sector saw a total of $1.12 billion investments during 2004-05 as compared to $780 million during 2003-04, showing a robust 42 per cent growth.

The IT sector witnessed about $66 million of investments across five companies during the quarter.

CVC International's $55 million investment in Caritor, a Bangalore and US-based IT solutions firm, was the single largest investment reported during the quarter, according to the data provided by TSJ Media. Caritor was not available for comments.

The second largest investment in this sector went to Pune-based IT services firm KPIT Cummins Infosystems which raised $8 million from US-based Lehman Brothers.

"Combined with the fact that 2004 had witnessed four IT services companies raising almost $47 million, these investments confirm the revival of VC/PE firms' interest in this sector," said Arun Natarajan, editor, TSJ Media.

Mumbai-based financial services-focussed software firm Financial Technologies (India) raised about $1.7 million from T Rowe Price International and Goldman Sachs.

"IT-enabled services companies, which attracted the maximum number of investments in 2004 (with 10 deals) and 2003 (with 22 deals), were conspicuous by their absence in the latest quarter," Natarajan said.

Four life sciences firms "" Elder Pharmaceuticals, Glenmark Laboratories, Avestha Gengraine and Arch Phama "" notched up $23 million for the sector.

The hotel industry witnessed three firms "" Leela Hotels, Chalet Hotels and CLG Hotels and Resorts "" raising a total of about $60 million. The automobile industry attracted the attention of private equity firms with CG Igarshi Motors, AVTEC and Swaraj Mazda raising about $15 million between themselves.

The textiles and garments sector attracted two investments with Sintex Industries and Welspun India, raising $73 million. The banking and financial services sector also secured two investments, Shriram Transport and Indiabulls Credit Services, worth about $42 million.

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Beneficiaries

• IT sector gets $66m
• Textiles sew up $73m
• Hotels consume $60m
• Lifesciences gets $23m
• Auto drives in $15m
• Financial services secure $42m