India outguns BRIC peers in PE play

By SiliconIndia   |   Wednesday, 23 January 2008, 10:57 Hrs
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Bangalore: According to an estimate by Emerging Markets Private Equity Association (Empea), India tops the BRIC (Brazil, Russia, India, China) markets with over 160 PE firms operating in the country, reported the Economic Times (ET). The source also reported that there are about 89 VC / PE firms managing 153 funds in Brazil, about 28 firms in Russia and 115 in China.

Majority of the PE firms operating in the country have raised money from outside India or are subsidiaries of non-Indian VC/PE firms. Experts opine that a soaring domestic economy has increased entrepreneurial activity and the IT (Information Technology) / IteS(IT enabled services) effect is attracting new investors to the country.

The number of experienced techies returning to India and setting up companies has also increased the exposure of Silicon Valley venture firms to the country the source added.

Alok Aggarwal, Chairman, Evalueserve's, a provider of Knowledge Services, Chairman told ET ?The regions that have traditionally received large amounts of VC/PE funding include U.S., UK, Canada, Germany, France, Nordics (Sweden, Finland and Denmark put together) and Taiwan. With the 2007 investment figures of $13.5 billion, India will leapfrog into the top seven regions in the world."

"Another 40 firms are in the process of raising money for investing in Indian market," he added.

For the record, there are different estimates by different agencies on total investments into India for 2007 ranging from $9.9 billion to $14.2 billion. Analyst expect the country to see PE commitments of around $40 billion by 2010-2011.

"Probably more sectors in India are open to private fund raising," said Alok Mittal of Canaan Partners, explaining that a sector-wise comparison between markets like China and India could throw up interesting data.

"There are more mature companies in India which is attractive to PE players. China tends to be more of a VC market though the scene has changed in the last the few years," told Arun Natarajan of Venture Intelligence told ET.

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