The total of private equity investments in India is set to cross $10 billion in the calendar year 2007 and may even touch $15 billion according to PricewaterhouseCoopers.
In the last 18 months private equity investments in India have picked up pace. According to Pricewaterhouse in 2005 the total private equity investment was $3.8 billion, in 2006 it moved up to $7.9 billion and in the first half of 2007 it has already crossed $6 billion.
PwC’s Sanjeev Krishan said: “In the last 18 months at PwC, we have done more work for private equity investors than for strategic investors. It was always the other way around before that. Private equity investments can touch $15 billion this year.”
In a study titled “Opening the flood gates” PwC has said that despite the concern of valuations of Indian companies, the sequential growth in Indian economy has kept the private equity players interested.
Grant Thornton released even more robust figures for July 2007. It’s deal tracker said that there were 30 private equity deals in July 2007 adding up to around $2.89 billion. It said that in June 2007, the total was at $1.81 billion for 36 deals.
In comparison, 59 strategic mergers and acquisition deals involving Indian companies in July 2007 added up to 0.94 billion. This included cross-border as well as domestic deals.
The PwC study points out that the investment by private equity players in financial services now account for 20 per cent of the total PE investments in India in the first half of 2007. However, the same had accounted for only around 7-8 per cent in 2006 and 2005.
In the first six months of 2007 India has seen a 550 mergers and acquisition deals adding up to $55 billion which is higher than the total of 2006. This was aided by big-ticket deals like Tata-Corus and Hutchison-Vodafone.