PE players sense deal prospects on maiden offer withdrawals
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Mumbai: Private equity (PEs) players may derive benefit from signs of weakness in the primary market issuance as higher cost of debt may not prompt issuers to borrow significantly, say experts. As companies will not like any delay in their future projects and expansion, weak response from the equity market is likely to push them towards PE. "Certainly, the environment is positive and has improved on the backdrop of this weakness, we can see better traction and momentum in PE deals," said Pankaj Karna, Partner and Head, Mergers and Acquisitions, Lead Advisory, Grant Thornton Corporate Finance. Two major public issues - Emaar MGF Land and Wockhardt Hospitals have been withdrawn on account of weak response from investors in the last two days, adding to the PEs? prospects. Last year, India witnessed over 150 percent rise in deals worth $70 billion, in which, $51.11 billion was the value of strategic mergers and acquisitions involving Indian companies, and the remaining $19.03 billion was the result of PE deals having average size of $47 million, says Grant Thornton?s Deal Tracker. Buoyant equity market and over-subscription of public issues were considered obstacles for deal execution with size of over $100 million. "This can be a good jolt for the companies and their demands will get a bit realistic now," said the partner of a Singapore-based private equity firm

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