Business | Investment
Private equity investment triples to $7.46b last year
Private equity investment in India more than tripled in 2006 as global heavyweights like Kohlberg Kravis Roberts & Co and UK-based 3i bought into growing companies.
- Reuters
- Published: 00:00 January 3, 2007
Mumbai: Private equity investment in India more than tripled in 2006 as global heavyweights like Kohlberg Kravis Roberts & Co and UK-based 3i bought into growing companies.
Private equity fund investment in 2006 was $7.46 billion, up from $2.26 billion a year earlier, a statement from industry tracking firm Venture Intelligence said yesterday.
Two of the most significant investments of the year were KKR's acquisition of the Indian software business of Flextronics International Ltd. for $900 million, and Providence Equity Partners Inc. buying into telecom firm Idea Cellular Ltd., which plans an IPO.
The growth momentum is set to continue with big investors such as Carlyle and Blackstone Group on the prowl and private funds possibly buying into unlisted mobile telecom firm Hutchison Essar Ltd.
But expectations for returns need to be tempered, experts say.
"I will not be surprised if the investment touches $10 billion in 2007," said K.E.C. Raja Kumar, chief executive at UTI Venture Funds. "However, we have to be careful to ensure that the momentum does not get derailed by unrealistic expectations."
Venture Intelligence said 2006 deals were led by the technology sector with 87 deals for $1.47 billion, up from 46 deals for $434 million in 2005.
However, private investment in listed companies fell to 22 per cent of total deals, from 34 per cent a year earlier, as the BSE's main index surged 47 per cent.
"It does not make sense for private equity firms to chase listed firms where the valuations have risen sharply," said Arun Natarajan, chief executive at Venture Intelligence.
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