The Hindu Business Line : Private equity investments soar: PwC

The total investments by private equity players have soared to $5.4 billion in the first nine months of 2006 against $2.2 billion in the whole of last year, global consulting firm PricewaterhouseCoopers said in a study.

As many as 246 deals have taken place so far in 2006 against 169 last year, it added.

The largest deal was the $900-million buyout by Kohlberg Kravis Roberts and Co, one of the largest PE funds in the US, for 85 per cent in Flextronics Software.

Singapore's Temasek bought 10 per cent stake in Tata Teleservices for $360 million, Farallon invested $143 million in Indiabulls Financial and Warburg Pincus acquired 27 per cent stake in Lemon Tree Hotels, PwC said.

The steady inflow of investments in India is attributed to the growing consumer spending, which has lead to emergence of high demand and a fast growing market. Besides, the increasing recognition of India as a high-quality, low-cost production and research and development destination also lured private equity investors to the country.

However, as compared to the traditional seed or growth stage funding that venture capitalists provide in other markets such as the US and Europe, investments in India have been for late-stage funding and private investments in public enterprises, PwC said.

Variety of sectors

PwC added that unlike the technology boom of the late 1990s and early 2000, investments are now being made across a variety of sectors such as auto components, real estate, infrastructure and pharmaceutical, indicating a gradual shift in focus from the traditionally blue-eyed information technology sector.

Several profitable exits were also made last year including Temasek /Newbridge's stake sale in Matrix, and Barings' stake sale in MphasiS.

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