21 December 2011

Private Equity Deals Increasing in India: Grant Thornton

Private Equity (PE) Deals are on the increase in India, as stated by the Global Private Equity Report, 2011 by Grant Thornton. As quoted by Harish H.V. Partner-India Leadership Team, Grant Thornton India, “Private Equity is the new force in India Inc and has been helping Indian entrepreneurs to scale up their businesses, inculcating good governance practices and provide strategic inputs.”
Private Equity Deals Increasing in India: Grant Thornton

There has been a 24 percent increase in the PE sector, with 347 deals amounting to $7.7 billion, as compared to last year. According to the Global Private Equity Report, 2011, the private equity sector is faring quite well in the Asia Pacific region, especially in India and even China. According to the Grant Thornton Dealtracker (Grant Thornton India) for the third quarter, 2011, PE deals added to $1.91 billion (94 deals) as opposed to $1.71 billion (58 deals) in 2010 and $0.68 billion (434 deals) in 2009. Also, India and Brazil are among the top BRICS nations to register positive growth private equity.

Sid Nigam, Partner, Head of M&A Grant Thornton, India said that “In India, family-and privately-owned businesses are the key source of private equity dealflow. As a result, a whole range of factors are important in sourcing deals, including networks, intermediary relationships, sector knowledge, local knowledge, track record and proven speed of execution.”  

According to the survey, the sectors which have benefitted from the increase in PE in the third quarter of 2011 are as follows – Real Estate and Infrastructure Management (28 percent increase - $532 million), Power and Energy (24 percent increase - $450 million), IT and ITeS (8 percent increase - $146 million), Banking and Financial Services (7 percent increase - $129 million) and Pharma, Healthcare and Biotech (7 percent increase – $125 million).

The major transactions in the PE sector include Govt of Singapore and Bain Capital, which invested about $850 million in Hero Investment, Apollo Global Management, which invested $350 million in Welspun Corporation and Texas Pacific Group, which invested $257 million in Shriram Capital.