VC deals in S India declines 20% in '07

The four southern states have witnessed a fall in number of venture capital (VC) investments in 2007. South India accounted for 37 per cent of VC deals in 2007 compared to a 57 per cent share in the previous year, closely followed by Western India which accounted for 36 per cent of the pie in 2007, according to industry experts.

VC firms invested a total of $543 million across 98 deals in India during 2007, according to Venture Intelligence, a Chennai-based private equity research firm. This was slightly higher compared to 2006 which witnessed 94 deals totalling $500 million.

Arun Natarajan, chief executive officer of Chennai-based private equity research firm Venture Intelligence, said Bangalore and Mumbai were favourite destinations for VC investors in 2007.

Bangalore attracted 29 investments followed by Mumbai with 24, Delhi and National Capital Region with 14 each, Hyderabad with 11 and Chennai with 5.

"Among the southern cities, Hyderabad is picking up fast in the micro finance, healthcare and life science segments," Natarajan added.

IT/ITeS accounted for 67 per cent of investments in the south, healthcare and life sciences for 10 per cent followed by media with 5 per cent, telecom at 4 per cent, retail and beverages with 3 per cent each and other sectors with 8 per cent.

Around 70-80 per cent of VC investments are presently going into the ITTeS sector which is still dominated by the south, he added.