India PE investment down 15% in 2012

The amount private equity firms invested in India during 2012 dropped 15% year-on-year, with Q4 figures especially low, according to Venture Intelligence data.

Private equity firms invested $8.8 billion over 406 deals in India during the whole of 2012, a 15 percent decrease from the $10.4 billion invested across 483 deals in the previous year, according to analysis from data provider Venture Intelligence.

While Q3 investment figures were boosted by the $1 billion Bain Capital acquisition of Genpact, deal value during the final quarter of the year was only $1 billion in total, a 32 percent decline from the $1.5 billion invested during the same period in 2011.

“Private equity managers are being more judicious and taking a longer period to deploy their funds,” Raja Kumar, founder and chief executive of Bangalore-based private equity firm Ascent Capital commented. “Limited partners' interest in Indian private equity funds continues to be lukewarm. This would change provided the current rally in public markets results in exit realisation for PE funds.”

information technology and IT-enabled services companies topped other sectors in terms of both investment value and volume during 2012, with 162 investments worth about $3.2 billion. It was followed by healthcare and financial services.

Sequoia Capital India, IFC and Accel India were the most active private equity investors in India during the year, with 17 investments each during 2012.

JPMorgan made the largest investment in India with the $1.1 billion acquisition of M*Modal in July.

Investment in India’s real estate sector was also depressed in 2012. Private equity real estate firms invested a total of $1.1 billion over 35 disclosed transactions during the year. The activity level was almost 38 percent lower than the $2.7 billion across 54 announced deals in 2011.