Private equity firms invested $1,392 million over 84 deals in India during fourth quarter of 2009, taking the annual investment numbers to $3,824 million over 232 deals, according to a study by Venture Intelligence, a research service focused on Private Equity and M&A transactions. The amount invested during 2009 was significantly lower than $10,468 million in 2008 across 443 deals.
“The volatility in the markets and continued uncertainty around the ability to raise new funds caused investment activity to be muted in 2009,” said Arun Natarajan, CEO of Venture Intelligence. “With just six investments above $100 million in size in 2009 compared to 22 in 2008 and 27, the year witnessed a clear decline in the appetite for large ticket investments,” says Natarajan.
The largest investment reported during 2009 was KKR increasing its stake in telecom software firm Aricent to 79 per cent for $255 million. The $180 million investment by existing investors IDFC PE and Oman Investments into independent tower infrastructure firm Quippo Telecom was the second largest bid in 2009. The third largest deal was Goldman Sachs’ $115 million investment in publicly-listed healthcare firm Max India for a 9.4% stake.
Private Equity firms obtained exit routes for their investments in 66 Indian companies during 2009, including 7 via IPOs. (2008 had witnessed 36 liquidity events including 10 via IPOs.) PE-backed companies raised about $1.31 billion via IPOs during 2009. The $604 million raised by Adani Power via its July IPO was the largest by a PE-backed firm in 2009. The total value of M&A transactions providing exits to PE-investors during 2009 was around $1.05 billion. These included 38 sales via public markets, 13 strategic sales, 4 secondary transactions (involving sale of shares by one PE firm to another) and 4 buybacks (by either the company or its promoters).
The largest M&A deal providing an exit during 2009 was ChrysCapital’s realizing of over $176 million during the year via public market sales of the shares of truck finance firm Shriram Transport Finance. (Chrys had invested $13.3 million in Shriram Transport in 2005.)
Venture Capital deals accounted for 37 per cent of the pie in volume terms in 2009, followed by Late Stage investments accounted for 28 per cent of the PE deals. Among cities, Mumbai based companies retained the top slot with 49 PE investments worth $850 million, closely followed by Bangalore with 42 investments worth $450 million and NCR with 36 investments worth about $1.08 billion.
