Fund-raising may have hit a slow patch in the Indian private equity (PE) market, but India-based deals look set to dominate deal-making in the Asia-Pacific PE markets this year.
Four out of the top 10 deals concluded by investors in the region in the first six months of 2007 were from India, against three for all of last year. The four deals totalled $449.69 million (Rs1,812 crore) and the deal sizes ranged between $72 million and $176 million, according to the US financial information services provider Thomson Financial.
So far, India is ahead of China in terms of the total quantum of money invested by PE funds, through 21 July, with $1.96 billion invested here against $1.68 billion in China.
The biggest Asia-Pacific deal in the first six months was concluded in China—Washington-based Carlyle Group LLC and an undisclosed investor bought a 9.02% stake in China Pacific (Group) Co. Ltd for $310 million. The third largest deal in the region was from India and involved Morgan Stanley Pvt. Equity picking up a 4.45% stake in Oberoi Constructions Pvt. Ltd for $152.93 million.
Incidentally, investments in the first six months have almost reached full-year 2006 levels, when PE firms invested $2.07 billion.
This does not include deals such as Kohlberg Kravis Roberts’ $900 million acquisition of Flextronics Software Systems’ India assets last year, which would be classified as a PE-backed merger and acquisition (M&A) deal.
Investments and PE-backed M&A deals in 2006 together accounted for almost $7 billion in terms of transaction value.
Deal sizes in the Asia-Pacific region ranged between $300 million and $70 million during the first half, which is not a significant change from last year. The largest deal in 2006 was Singapore-based Temasek Holdings Pte Ltd’s $900 million investment in Fraser & Neave Ltd, also in Singapore.
Growth and expansion stage investments, barring a few exceptions, dominated deals in the region last year and continue to be the trend in the first six months this year. In India, the accent has been on growth deals. In recent months, buyout deals have made an appearance, notably New York-based Blackstone Group’s acquisition of an 80% stake in Intelenet Global Services.