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Indian private equity enjoys prolific Q1

India has attracted $1.4bn in private equity and venture capital investment in the first three months of the year – more than 3.5 times the amount committed in the same period last year.

India has drawn $1.4 billion ( €1.16 billion) from private equity and venture capital firms that invested in 69 local companies in the quarter ending March 2006, according to Venture Intelligence India. The amount invested during the period was up 3.5 times from the same period a year ago and 1.7 times higher than the previous quarter.

 

Average deal size also grew to $20 million (€16.5 million), from $14 million in the first quarter of 2005, Arun Natarajan, editor of Venture Intelligence said in a statement. “Apart from Temasek’s investment in Tata Tele Services, the increasing investments by PE firms in the real estate industry as well as in mature IT, business process outsourcing (BPO) and manufacturing companies, has contributed to the rise in deal sizes.”

 

The same study also showed a strong uptick in the number of early-stage investments compared with the past several quarters. Sixteen transactions were recorded, including “half a dozen investments by top-rung Silicon Valley VC firms like Kleiner Perkins, Sequoia, DFJ and Norwest in Indian consumer internet and mobile services companies,” Natarajan said.

 

The growth and late-stage segments accounted for 10 and 16 investments respectively.

 

The IT and IT-enabled services (ITES) industry drew the most number of investments, with 22 deals worth $558 million (including Temasek’s $360m Tata investment) over the first quarter. Private equity and VC firms favoured companies in online and mobile services and IT services.

 

After the IT/ITES sector, manufacturing (11 deals), and real estate (8 deals) stood out as preferred industries for private equity investors.

 

Venture Intelligence India, a division of Chennai-based TSJ Media, provides information on private equity, venture capital and M&A deals in India and Indian-founded companies worldwide.