VCs, private funds invested over $1.1 bn in 66 firms

Venture capital and private equity firms invested over $1.1 billion in 66 Indian companies during 2004, according to data from TSJ Media. The amount invested during the year was significantly more compared with the $774 million invested during 2003.

Warburg Pincus' $149 million investment in New Delhi-based Moser Bayer, a listed company engaged in making of optical storage media, was the single largest investment during 2004.

"A major portion of the venture capital and private equity investments in 2004 went to late-stage and publicly-listed companies," said Arun Natarajan, editor of TSJ Media. "The year witnessed as many as 20 private investment in public enterprises (PIPE) deals," he added.

The top venture capital and private equity fund investments in 2004 besides Moser Bayer was Asia Debt Management Fund's $ 57 million investment in India Cement, CVC International and Henderson's $ 50 million investment in the pharmaceutical Jubilant Organosys, Merlion India Fund's $ 50 million investment in Punj Lloyd, Warburg Pincus's $ 45 million in Max India and Temasek, WestBridge Capital's $35 million in the business Porcess Outsourcing company ICICI OneSource.

The business process outsourcing (BPO) sector attracted the maximum number of investments in 2004 with nine companies raising about $148 million. However, investments in the sector declined both in terms of the number of deals as well as the total amount invested compared with 2003.

Private equity firms spread their attention on a range of sectors including manufacturing, healthcare, banking and financial services, pharmaceuticals, engineering & construction and textiles & garments during 2004. With the boom in mobile telephony services in the country, telecommunications technology firms also caught the attention of investors.

Year 2004 also witnessed VCs moving away from their usual focus on export-led sectors and paid more attention to companies that could benefit from the booming domestic economy.