India

Genpact deal props up quarterly PE investment in India

Private equity firms invested about USD2,521m across 97 deals in India during the quarter ended September 2012, according to a study by Venture Intelligence.

Thanks to the USD1bn investment by Bain Capital in US-listed, Gurgaon based BPO firm Genpact, the investment amount showed a growth of 4.4 per cent over that invested in the same period last year (USD2,415m across 120 transactions) and a healthy 32 per cent over the immediate previous quarter (which had witnessed USD1,909m being invested across 105 transactions).

Despite the quarterly up tick, the total PE investments in the first nine months of 2012 at USD6,488m across 309 transactions, significantly trails the USD8,882m across 357 transactions in the same period in 2011.

Bain Capital Partners’ purchase of shares held by previous PE investors - General Atlantic and Oak Hill Capital - in NYSE-listed, Gurgoan-based BPO firm Genpact for approximately USD1bn was the largest PE investment during Q3’12 by a huge margin, with no other investment crossing the USD200m figure. The second largest investment during the period was SBI-Macquarie’s USD150m investment in Ashoka Concessions, a road-construction subsidiary of publicly-listed Ashoka Buildcon.

Led by the Genpact deal, IT & ITES companies attracted USD1,295m (51 per cent of the value pie) across 45 reported investments during Q3’12. In other IT & ITES transactions, Blackstone acquired a 6.1 per cent stake in publicly listed Financial Technologies India through open market transactions; Actis invested USD40m in ATM outsourcing and payments company AGS Transact Technologies and Carlyle picked up shares worth USD39m in publicly listed Infotech Enterprises.

Venture capital type deals accounted for 54 per cent of the investments (in volume terms) during Q3’12 compared to 42 per cent in the corresponding period a year ago. The share of late stage deals was 21 per cent, while the share of listed company investments was 13 per cent during the latest quarter.

Private equity real estate firms made 10 investments (amounting to USD394m across nine deals with disclosed values) during the quarter ended September 2012. The volume of investments was down by 44 per cent compared to the 18 investments in the same period in the previous year (which witnessed USD726m being invested across 13 transactions with disclosed values), but up by an almost similar figure compared to the seven investments (USD172m across six deals) during Apr-Jun 2012.

Blackstone’s proposal to acquire a stake in the office space portfolio of Bangalore-based developer Embassy Property Developments for a reported USD230m was the largest reported during Q3 2012.

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