PE investment declines by 23.28 percent in 2008, lowest since 2002
Tuesday, 13 January 2009, 20:48 IST
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Chennai: Private equity (PE) investment in India witnessed a decline of 23.28 percent in the year 2008, a drop after six years. During the period, the country saw PE investment of $10.74 billion across 399 deals as against $14 billion over 439 deals in the previous year, finds Venture Intelligence. Majority of deals happened in the first half of 2008, while the second half looked dry. The largest deal in 2008 was of Aditya Birla, who raised $640 million from Providence Equity Partners in return of a 20 percent stake. "The October-December period in 2008 became a challenge for investors. The entrepreneurs were not willing to relax valuation, because they were hoping markets would get back to normal," Arun Natarajan, Founder and CEO, Venture Intelligence told The economic Times. C Venkat Subramanyam, Director, Veda Corporate Advisors said, "The correction in secondary markets was sudden, swift and it took everyone by surprise. There was a feeling that it would reverse, so entrepreneurs did not want to renegotiate prices. Investors, on the other hand, did not know where this price correction would end." IT and ITeS sector is still the favorite segment among PE investors as it had 107 investments in 2008, while in terms of investment amount, energy outshines IT and ITeS by attracting $1.7 billion. IT sector has attracted almost $1.6 billion. In terms of the number of investments, companies based in South India stood at top, while Western India-based companies attracted a higher share of the pie in value terms. Taking it city wise, Mumbai-based companies dominated in the list by attracting 105 deals worth $3.2 billion, followed by Delhi and Bangalore.
Source: IANS