Through this, India has maintained its position as the hottest investment destination in Asia (excluding Japan) and has even surpassed China, which has recorded just $570 million so far. In 2006, China received $13 billion in PE investments in 2006 compared with India's $7 billion. The equation has changed since then, with India well in the lead now. According to a statement from IndusView Advisors, a corporate advisory firm, India outpaced China in the second quarter of calendar year 2007 when it had grossed $10 billion compared to China's $8 billion. |
The Indian real estate and infrastructure sectors are the key contributors with 28 per cent share in value of all PE investments at $1.12 billion, followed by the power sector with 13 per cent share of the pie with $520 million so far this year.
Banking & finance and telecom sectors tied for the third most favourable sectors for investments with 8.7 per cent of the deals at more than $340 million each.
Fundraising by international realty PE funds has been brisk with as much as $130 billion raised in the last two years, according to estimates. A large percentage of these funds raised are for investing in emerging markets such as India and China.
"With the economic downturn in developed economies intensifying and the application of capital becoming dearer "" compounding the pressures on expected Return on Investments (RoIs) "" PE firms are finding their way into safer investment heavens like the emerging markets that have decoupled from the developed markets," says Bundeep Singh Rangar, Chairman of IndusView.
"India continues to enjoy a favourable investment flavour among investors due to liberal economic initiatives on the part of the government when compared to China, which is much regulated," added Rangar.
Tackling the need for better infrastructure, the government has announced that 9 per cent of the country's Gross Domestic Product (GDP) will be spent on infrastructure by 2012.
It has led to renewed interest in the sector, which has seen fresh fundraising of up to $8 billion in the pipeline this year, with financial entities such as SBI, Macquarie Capital, 3i Group and Blackstone among others, chipping in.
