PRINT THIS PAGE Private equity firms invest $395m during April-June 200504/07/2005. Source: TSJ Media.
The increasing interest among private equity firms to invest in Indian manufacturing companies and the entry of brand name US venture capital firms were the highlights of the latest quarter, a TSJ Media study reveals. Private Equity firms invested about $395 million in 36 Indian companies during the quarter ended June 2005.
According to data from TSJ Media, which tracks venture capital activity in India and Indian-founded companies worldwide, the amount invested in the latest quarter was higher compared to same period last year (during which 12 companies had raised about $300 million) as well as the January-March 2005 quarter (which had witnessed 29 investments totalling about $355 million).
The April-June 2005 quarter witnessed 15 companies raising investments of $10 million or more. The $32.6 million investment raised by Mumbai-based ABG Shipyard from Merlion India Fund and IL&FS Investment Managers was the single largest investment during the period.
While the focus on mid- and late-stage companies continued, the number of "PIPE deals" (private investments in publicly-listed companies) declined to 10 (compared to the 19 deals that accounted for two-thirds of all the investments in the January-March 2005 quarter).
"Manufacturing companies topped in terms of both number of investments as well as the amount of funding raised," said Arun Natarajan, Editor, TSJ Media.
The industry was led by Rico Auto Industries, a Gurgaon-based publicly listed manufacturer of automobile components, which raised about $24 million from Morgan Stanley, New Vernon Bharat and Bessemer Venture Partners.
The IT and IT-enabled services (ITES) industry followed second with 8 investments worth $52 million. The healthcare industry came in third with 5 investments worth $76.5 million.
The Engineering & Construction, Media & Entertainment and Textiles & Garments industries witnessed 3 deals each worth about $66 million, $20 million and $17.5 million respectively.
Bangalore-based telecom R&D firm Sasken Communication Technologies, which has filed for an IPO, raised two separate rounds of funding from leading US VC firms during the quarter. Sasken attracted $9 million from New Enterprise Associates and $3 million from Nokia Growth Partners.
"A special highlight of the latest quarter was the flurry of actual investments by US-based VCs who had made exploratory visits to India in 2004," notes TSJ Media's Natarajan. "That US funds are making direct investments in Indian companies - and not settling for US companies with a back-end in India like earlier - signals a new phase in the growth of the VC/PE industry in India."
TSJ Media's products and services help entrepreneurs, venture capitalists and hi-tech industry executives in their decision making. Their Venture Intelligence India service, launched in mid-2002, is the leading source of information on venture capital investments in India and Indian-founded companies worldwide.
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