Financial Daily from THE HINDU group of publications
Saturday, Jan 21, 2006
Financial Daily from THE HINDU group of publications Saturday, Jan 21, 2006 |
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Venture Capital Markets - Investments Pvt equity investments up $700 m in 2005: Study Our Bureau
Chennai , Jan. 20 INVESTMENTS from private equity and venture capital firms in Indian companies in 2005 recorded an increase of $700 million over 2004, according to data from Venture Intelligence India, a division of TSJ Media that provides data on private equity, venture capital and M&A deals in India and Indian-founded companies worldwide. The amount invested was about $2.3 billion in 147 deals in 2005 compared to $1.6 billion invested across 68 deals during 2004. "Like in the case of the public stock markets, we are witnessing historically high investment levels in the private equity industry as well," said Mr Arun Natarajan of Venture Intelligence India. According to a release, late-stage and publicly listed companies accounted for over 60 per cent of PE investments in 2005, but early-stage companies re-emerged on investors' radar screens during the year. The study said that in the last couple of years, early-stage funding tended to be dominated by the Indo-US cross border technology companies that are headquartered in the US but carry out a bulk of their R&D in India, but in 2005 purely India-based early-stage companies attracted investor interest. The study said that a majority of the investment went into the Information Technology and IT-Enabled Services (IT & ITES), with 44 deals worth about $474 million. This was followed by the manufacturing industry (sans the textile and automobile industry), with 26 deals worth about $366 million. "2005 is a year in which Private Equity has clearly established itself as a catalyst that can take Indian industry to the next level," Mr K.E.C. Raja Kumar, CEO of Bangalore-based UTI Venture Funds, was quoted as saying in the report. "Companies across stages and sectors now have a clear appreciation of the value-add that private equity firms bring to the table. We will, therefore, not be surprised if the investment figures double during the current year," he had said. The study said that 41 per cent of all PE investments during 2005 (in value terms) happened in the South. Twenty four of these investments were in IT & ITES companies in the region. Western India attracted 40 per cent of the investment amount.
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