India grabs 2nd slot in Asia-Pacific rankings

PRIVATE EQUITY WATCH

India has ousted Taiwan from the second spot in the Asia-Pacific private equity rankings in the first half of calendar 2007, according to Thomson Financial.

The average PE deal size in BRIC countries this year, as per Thomson Financial, increased to $52 million from $46.4 million from the same period last year.

In Asia-Pacific, India beat Taiwan to rank second in terms of the value of deals. Australia tops the chart with PE deals worth $12,353.4 million, followed by India at $2,433 million. Taiwan saw investments of $1,901.7 million, while Singapore saw private equity investments of $1473.2 million. China was ranked fifth with deals worth $678.7 million.

For the same period last year, India was at the third position with PE investments of $1,556.8 million, after Taiwan which witnessed investments of $2,547 million.

According to Grant Thornton the average deal size in India has increased to $30 million plus in 2007 from $26 million in 2006 and $16 million in 2005.

"Valuations per se are going up and the markets have also been going up. Businesses have also been doing reasonably well and so the exvpectations of the people running the businesses are also increasing and the performance of most companies is good," said Sanjeev Krishan-executive director, PWC.

"The fund sizes have gone bigger for big deals than for small deals. And people are willing to shell out more stake and valuations have also increased," said a senior executive with a top consultancy firm.

The average private equity (PE) deal size in India is going up by the day, courtesy the several mega PE deals clinched in recent times.

Last week, Temasek, the investment arm of the Singapore government, picked close to 5 per cent in Bharti-Airtel for about $2,000 million. In May, Carlyle group and Citigroup invested $768.597 million in HDFC. The US-based Blackstone Group invested in Ushodaya Enterprises about $275 million.

"We will see an increase in the ticket size of private equity deals in the coming days. Overall as the market becomes more mature there will be more investment in growth capital companies. There the size of the investment will also be large. These funds are used mostly for acquisition or for setting up sales & marketing offices and so the funds will be large," said Atul Mehta, partner, Ernst & Young.