PE firms invest US$2.8bn in Q2 CY08

Private equity firms have invested about US$2.8bn in 77 Indian companies during the quarter ended June, according to a study by Venture Intelligence, a research service focused on private equity and venture capital.

The amount invested during the quarter was higher than that during the same period last year, when 74 deals totaling US$1.9bn had taken place. But, this was significantly lower compared to the immediate previous quarter (which witnessed 115 deals worth US$3.6bn).

The latest numbers take the total investments by private equity firms in the first six months of 2008 to over US$6.3bn as against the US$5.4bn invested during the corresponding period in 2007, Venture Intelligence said.

The largest investment reported during Q2 CY08 was US$640mn raised by Aditya Birla Telecom (ABTL), a subsidiary of listed mobile telephone services provider Idea Cellular, from Providence Equity Partners.

"The steep fall in the public markets has resulted in a marked decline in the number of PIPE, Pre-IPO and Late Stage investments during the latest quarter," said Arun Natarajan, Founder & CEO of Venture Intelligence.

"There has been a significant drying up of investments in the BFSI and Engineering & Construction sectors compared to last year. While Power and Telecom companies continue to attract large ticket investments, the positive surprise this year has been the re-emergence of Healthcare and Life Sciences on the radar screens of PE investors," he added.

The April-June quarter also saw more than US$2bn being raised for PE investments in India, with a substantial portion accounted for by infrastructure-focused offerings from 3i and Axis Bank, Venture Intelligence said.