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Mega buyouts prop Indian PE investments to USD2.3bn in Q213

Private equity firms invested about USD2.3bn across 82 deals in India during the quarter ended June 2013, according to early data from Venture Intelligence.

The investment amount was 17.7 per cent higher than that invested in the same period last year (USD1,980m across 114 transactions) and almost 2.3 times than that invested during the immediate previous quarter (USD1,021m being invested across 80 transactions).
The figures do not include PE investments in Real Estate. Also the USD1,260m investment by Qatar Foundation in publicly listed Bharti Airtel has been excluded in the analysis.
The latest numbers take PE investments in the first six months of 2013 to USD3,351m (across 163 investments) down 19.1 per cent compared to the corresponding period of 2012 (USD4,143m across 238 investments).
There were seven PE investments worth over USD100m (with three above USD200m) during Q2’13 compared to three such transactions in the same period last year and just one during the immediate previous quarter, the Venture Intelligence analysis showed.
The top two PE transactions during Q2’13 involved the buyout of existing PE investors by new ones: KKR’s USD460m acquisition of a majority stake in off-highway tires focused Alliance Tire Group (from fellow PE investor Warburg Pincus and the promoters) and the USD270m buyout by Partners Group of the existing PE investors in IT Services firm CSS Group (SAIF, Goldman Sachs and Sierra Ventures). Baring Asia’s USD257m investment in Lafarge India, the Indian subsidiary of French cement giant Lafarge, was the third largest in the period.
Apart from exiting CSS, the PE arm of global investment banking firm Goldman Sachs was also particularly active on the investing side during the quarter. Goldman invested an additional USD135m in existing portfolio company ReNew Wind Power; USD110m in listed cable TV firm Den Networks and USD20m in medical devices firm BPL Medical Technologies. 
Led by the Alliance Tire and Lafarge India deals, manufacturing companies grabbed over a third of the PE investments (by value) in Q2’13. Manufacturing (USD796m across six investments) was followed by IT & ITES (USD453m across 31 investments) and energy (USD235m across four investments) in terms of being the most favoured industries for PE investments in the period.
Outside of the CSS Group buyout, the top PE investments in IT & ITES companies in Q2’13 included the USD50m follow-on round raised by e-commerce firm from a consortium of investors (led by strategic investor eBay and including new investors Intel Capital and Russia based RuNet Holdings) and the USD25m investment by TA Associates in Fractal Analytics.
Among energy deals, the ReNew Power deal was followed by the USD90m raised by NSL Renewable Power from a consortium including IFC, DEG, FE Clean Energy, ADB, Asia Clean Energy and Proparco.
VC type investments accounted for 49 per cent of the investments during Q2’13 (in volume terms) compared to 54 per cent in the corresponding period a year ago. The share of late stage deals remained flat (at 24 per cent), while the share of listed company investments showed tick up to 13 per cent (from 11 per cent).
Private equity-real estate firms made 13 investments amounting to USD318m across 12 deals with disclosed values during the quarter ended June 2013, according to the data from Venture Intelligence. The volume of investments perked up significantly from the seven investments in the same period in the previous year, which witnessed USD172m being invested across six transactions with disclosed values, and also the eight investments (worth USD569m) during the Jan-Mar 2013 quarter. However, PE-RE investments in the first six months of 2013 at 21 transactions (USD887m across 20 deals with disclosed values) are still down 16 per cent compared to the 25 investments in the corresponding period in 2012 (USD659m across 22 investments).

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