Indian private equity deals hit $6.39bn in 2008

Private equity investments showed an increase in the first five months of 2008 even as the value of all other M&A deals fell significantly.

In the first five months of 2008, there were 170 private equity deals announced in India with a value of $6.39 billion (€4.1 billion), according to global consulting firm Grant Thornton.

In the month of May itself, private equity firms announced investments of $1.45 billion in 14 private equity transactions. In the same period a total of 49 other M&A deals were announced in the country with an aggregate value of $2.92 billion, while in May 2007 a total of 159 private equity transactions were announced with a value of $4.97 billion.

In all of 2007, 405 private equity investments in India hit $19.03 billion, according to the report.

Both, the number of private equity deals and the average size of deals have increased in the last few years. In 2005 for instance, private equity investments stood at $2 billion invested in 124 deals and in 2006 there were 302 deals worth $7.9 billion, the report noted.

While the value of private equity deals in the first five months of 2008 has increased vis-à-vis the corresponding period last year, the value of all other M&A activity in the first five months has decreased significantly from $42.24 billion last year to $13.66 billion in 2008.

In 2007, the main sectors that drew private equity investments in India were real estate and infrastructure, 36 percent; telecom, 18 percent; and banking and financial services, 17 percent.

The largest private equity transaction in May was Providence Equity Partners’ $640 million investment in Aditya Birla Telecom, a subsidiary of Idea Cellular, for a 20 percent stake.