2006 sees private equity companies invest $7.5bn in India

'The amount invested during 2006 was three times that during the previous year, which itself was a record one,' said Arun Natarajan, CEO of Venture Intelligence.

He went on to point out that mega deals like Idea Cellular's pre-IPO placement and the KKR-Flextronics Software buy-out contributed significantly to the total. The year witnessed several large global PE companies - with appetite for large deals - making their first investments in India. There were 26 deals involving investments of $50m during 2006 compared to just nine such deals in the previous year, the Venture Intelligence research showed.

'Private equity companies are boldly creating innovative partnerships with entrepreneurs to take corporate India to new levels. I will not be surprised if the investment amount in 2007 touches $10bn,' added KEC Raja Kumar, CEO of Bangalore-based PE firm UTI Venture Funds. 'However, going forward, we have to be careful to help ensure that this momentum is sustainable and does not get derailed by unrealistic expectations.'

Information technology and IT-enabled services continued to remain the favourite industry among PE investors during 2006 accounting for $1.5bn across 87 investments. The manufacturing industry followed, attracting 55 investments worth $962m. Other industries that attracted significant PE investor attention during the year included banking, healthcare and life sciences and engineering and construction.

Late stage investments accounted for 36 per cent of all deals while PIPEs accounted for 22 per cent of the deals. Early stage investments accounted for about 20 per cent of deals during 2006.

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