PE Investments Fall by Half During March Quarter This Year

Bangalore: Private equity (PE) investment fell to $1.88 billion across 90 deals during the quarter ended March this year, less than half compared to the same period last year.

This was the third consecutive quarter of deceleration, says a report from research firm Venture Intelligence.

During the first quarter of calender year 2011, private equity firms had invested $3.61 billion across 107 transactions.

Venture Intelligence said there has been a dearth of mega deals during the quarter, which was the main reason behind the decline in the overall PE deal activity.

There were six reported PE investments worth over $100 million and none above $200 million during the quarter ended March, compared to 9 such deals in the same period last year, which included 5 transactions over $200 million.

Healthcare and life sciences cornered bulk of PE investments as the sector attracted $581 million (31 per cent of the value pie) across 14 investments during the period.

Three of the six investments worth over $100 million each during the quarter went into the hospitals and clinics sector. About $110 million was infused into Care Hospitals (by Advent International) and $100 million each invested into DM Healthcare and Vasan Healthcare (by Olympus Capital and by the Singapore Government-owned GIC, respectively).

Healthcare was followed by IT & ITEs companies with $308 million across 35 reported investments and BFSI (banking, Financial Services and Insurance) firms with $280 million across 11 investments.

The trend of the larger PE firms buying out the stakes of earlier PE/VC investors in Indian companies gathered momentum during the quarter.

The GIC-Vasan deal was one such case (which saw a part exit for Sequoia Capital India). The $104-million deal by General Atlantic in Fourcee Infrastructure also witnessed the complete exit for Mayfield, and the $50-million investment by Warburg Pincus saw part exit for Motilal Oswal PE.

Meanwhile, PE-real estate firms made 12 investments (amounting to $477 million across 10 deals with disclosed values) during the quarter ended March 2012.

The largest PE-realty investment announced during the first quarter of this year was GIC's $100 million investment in a Godrej Properties office project in Mumbai's Bandra Kurla Complex--the only deal over $25 million reported during the period.