Emerging Indian companies, which are on the growth mode, need not necessarily be wary of the rise in interest rates to fund their expansion plans. The private equity (PE) brigade is waiting with pretty deep pockets and is expected to add further weight during the second half of the current calendar year.
According to PE industry experts, India-focused funds are expected to raise close to $5 billion in the six months from June to December, more than double in the same period last year. What’s more interesting is that these funds are able to raise amounts ranging from $700 to $1 billion hardly within three months.
IDFC Private Equity, for example, raised its third fund of $700 million in just a month’s time. Sequoia India Capital, in late August, closed its growth equity fund at $725 million taking its total corpus to $1.8 billion.
According to data from Venture Intelligence, a venture and private equity research firm, India-focused PE funds in the first half have raised a little over $3 billion as against a total of around $8.5 billion in entire 2007. “With $5 billion in the pipeline, these funds cumulatively will be able to maintain the same levels as last year,” noted an industry analyst.
Sumir Chadha, managing director, Sequoia Capital India, said, “The raising of Sequoia Capital India Growth Fund II demonstrates our belief in the strong growth in India, and builds on the performance of our first growth fund. This fund allows us to offer the Sequoia Capital platform of global networks and local knowledge to growth companies and help them expand into market leaders.”
Sequoia had earlier raised $400 million in 2006 besides having three funds in the venture capital segment.
“We believe India has a high number of promising companies that are poised to take their businesses to the next level and we are committed to investing and partnering with these firms to help them achieve their goals,” added Sandeep Singhal, managing director, Sequoia Capital India.
In addition to the Sequoia and IDFC Private Equity, IL&FS Investment Managers is expected to close its $400 million fund any time soon, followed by Jacob Ballas’ $500 million, UTI Ventures’ $450 million besides a few others who are in the process of putting funds in place.
