PE Investments At Record High, Cross $13 Bn In 9 Months

<p><strong>Paramita Chatterjee</strong><br><br>Investors and entrepreneurs have reasons to smile. Private equity (PE) investments in the country in the last nine months of this calendar year have not only shown an upward trend, they are poised to cross the historical highs of 2007 – the boom period of investments in India.<br><br>Between January and September this year, PE firms invested $13 billion across 504 transactions in a diverse range of sectors, with IT grabbing a majority share of investment pie, as per data available with research firm Venture Intelligence. In 2007, the bumper year for investors, the capital deployed by PE and venture capital (VC) firms stood at $14.7 billion across 535 transactions. The data, however, does not include real estate investments. &nbsp;<br><br>Within IT, internet as a sector has been evincing significant investor interest in the recent times. This has specially been possible due to the changing digital landscape over the past 1-2 years, which has prompted several budding entrepreneurs to ride on the domestic consumption wave. Take for instance the third quarter of 2015 or the July-September period alone.<br><br>The mega deals in the Internet sector along with the Blackstone buyout of Internet ensured that IT &amp; ITES companies grabbed as much as 57 per cent of the PE investment by value, attracting $3,358 million across 107 deals, the Venture Intelligence data shows. Other Internet firms that received funding worth $100 million includes music service Saavn.com, furniture e-tailer Pepperfry.com and hotels aggregator Oyo Rooms. Tata Capital, meanwhile, was reported to have committed a similar amount as part of US-based taxi hailing app firm Uber's latest fund raise.<br><br>“Over the past one year in particular, there has been an explosion of online companies that have the potential to generate superlative returns,” said Arvind Mathur, President at Private Equity and Venture Capital Association (IVCA). “Sectors such as mobile and online services offer tremendous opportunity. The nature of the business here is such that on an average even if one out of 10 becomes a blockbuster, the purpose is served,” he added.<br><br>In the third quarter of 2015 ended September, PE firms invested a record $5,893 million across 177 deals, up 125% over that invested in the same period last year where investors infused $2,621 million across 126 transactions.<br><br>Apart from internet, other sectors that attracted funding include energy, telecom and BFSI, among others. What’s interesting is the fact that these sectors have ranged higher in terms of investments when compared to the traditional sectors like healthcare and infrastructure. While healthcare has come down drastically in the investment pie chart, interest in infrastructure seems to have completely faded.<br><br> “There are a few issues in infrastructure that need to be resolved first. In fact, a lot of things are stuck due to regulatory hurdles,” said MK Sinha, managing partner and CEO of IDFC Alternatives, a leading multi-asset class investment manager in the country, in a recent interview to BW.</p><p>“There are no power plants that have come up in the past 3 years. Also, no headway has been made as far as amendments are concerned in the land acquisition bill, even as the new government is doing its bit to push it. Things are over all very slow in this space,” he added.</p>