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Private equity funds sniff for opportunities
Janaki Krishnan, Nikhil Lohade in Mumbai |
September 30, 2003 09:15 IST
Global private equity firms have been camping in India for the last two to three weeks, scouting around for investment opportunities. Apart from the usual big names such as Newbridge, CDC, AIG and Warburg Pincus, a number of other private equity firms have also made their maiden appearance on the Indian scene.
| Eye on deals |
Apart from the usual big names such as Newbridge, CDC, AIG and Warburg Pincus, a number of other private equity firms are making their maiden appearance on the Indian scene. The trigger for all this activity is ICICI Venture's investment in Tata Infomedia and the CDC investment in Punjab Tractors. Investment bankers say that these two investments suddenly sparked off interest among the overseas private equity investment community in the Indian market. |
These include the Carlyle group, CVC Capital, Advent, Bridgepoint, Lloyds Development Capital and Barclays.
The trigger for all this activity is ICICI Venture's investment in Tata Infomedia and the CDC investment in Punjab Tractors.
Investment banking circles say that these two investments suddenly sparked off interest among the overseas private equity investment community in the Indian market.
Industry circles say these private equity firms are now willing to come in as strategic investors, rather than as passive investors which was the case in the past.
Private equity firms are mainly looking at segments such as the food industry (in the fast moving consumer goods sector), fashion, the personal health care segment and the media.
In fact, market sources say that at the moment three deals are in the pipeline, valued at between $20 million and $50 million each.
Investment bankers say that these deals make sense since no bigger deals are available and bigger firms feel the returns on such small investments can be high.
The media industry is especially seen as attractive since it has been opened up for foreign investment and the industry doesn't have enough cash.
The last time private equity funds were really interested in India was during the dotcom boom. But investment levels were fairly low then and funds were largely passive investors in ventures.
The interest expressed by private equity funds in the Indian market is part of a larger global phenomenon. Many financing companies are expressing interest in the Asian region.
For instance, recently a US-based private equity firm, Lone Star Funds, took a 51 per cent stake in Korea Exchange Bank for $1.2 billion.
Earlier, another US-based fund, Ripplewood Holdings, agreed to buy Japan Telecom Holding Company's fixed-line operations from Britain's Vodafone Group Plc for $2.2 billion.