New Delhi: Private equity investments in listed firms have suffered a loss of as much as $850 million so far this year amid continuous downfall and tough market conditions, a latest study reveals.
An analysis of private investment in public equity (PIPE) in 2007 shows that these deals in the country have lost funds to the tune of $850 million till July 14 this year.
The loss can be attributable to high entry valuations and the downward revision of risk appetite of the capital markets this year, NEXGEN Capitals, the merchant-banking arm of brokerage firm SMC Global Securities, said in its latest report.
Overall till-date-return on PIPE deals of 2007 on volume basis has declined by 16.08%, the report added.
An industry wise return percentage so far this year highlights that “wealth creation is highly imbalanced in different sectors”.
In IT and ITeS sector, there was sharp dip in current mark-to-market values of around 41% in PIPE deals of 2007. While, in infrastructure sector the decline was 52%, in healthcare 44% and in manufacturing 34%.
Real estate sector also witnessed a sharp decline of 46% in the values so far this year largely due to correction in some real estate pockets in the country and worsening capital market perception of the same.
Though PIPE deals performance in real estate sector has disappointed on capital markets, realty companies overall financial performance is still encouraging despite tough real estate markets and slowing economy, the report said.