)
India witnessed investments worth $4.93 billion by private equity and venture capital players in the first half of this year while investor sentiment has improved following general election results, says a report.
Global consultancy EY today said private equity and venture capital (PE/VC) entities pumped in $4.93 billion across 229 deals in the first half of 2014. It is higher than the amount of $3.63 billion invested by them in the last six months of 2013.
However, investments in the January-June 2014 are lower than $5.48 billion recorded in the first half of 2013.
As per EY report, investor sentiment has certainly improved in the last month post general elections but it is too early to reflect in the deal data. "June 2014 recorded $931 million invested across 46 deals," it added.
After three decades, a single majority government under Prime Minister Narendra Modi has come to power at the Centre.
"There is ample dry capital available for investments - and with the new government in place and improved investor sentiment, we expect greater deal activity in the H2 2014," EY said while adding that the sentiment would also somewhat depend on the upcoming Union Budget.
EY said that fund raising seems to have improved with number of India-focused PE funds looking to raise money. Plans to raise about $2.3 billion were announced in the first half of this year. During the same period, funds to the tune of $1.9 billion were raised.
"There has been a sustained increase in investments in technology sector with 60+ investments in H1 2014. Around 80 per cent of these were in the venture/early stage category," it noted.
Infrastructure and manufacturing segments are projected to see greater PE activities, especially since the government is putting thrust on them.
Noting that more number of exit activity through IPOs and strategic deals are expected in the coming months, EY said already improved interest from overseas investors is being witnessed.
"This should also lead to increase in buyout deal activity," it added.
