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Private equity firms invest USD11bn in India during 2008

Private equity firms invested USD10,793m in over 399 deals in India during 2008, according to a study by Venture Intelligence, a research service focused on private equity and venture c

Private equity firms invested USD10,793m in over 399 deals in India during 2008, according to a study by Venture Intelligence, a research service focused on private equity and venture capital.

The figures include venture capital investments, but do not include private equity investments in real estate.

The amount invested during 2008 was significantly less than the previous year, during which USD14bn was invested across 439 deals.

‘2008 was the first year since 2002 that private equity investments in India have witnessed a year-on-year decline,’ says Arun Natarajan, founder and chief executive of Venture Intelligence.

The largest investment reported during 2008 was the USD640m raised by Aditya Birla Telecom, a subsidiary of listed mobile telephone services provider Idea Cellular, from Providence Equity Partners in return for a 20 per cent stake.

With 107 investments, information technology and IT-enabled services retained its status as the favourite among private equity investors during 2008.

In terms of investment amount, energy topped attracting USD1.7bn, closely followed by IT and IT-enabled services which attracted almost USD1.6bn.

Late stage deals accounted for 38 per cent of the pie in volume terms and 51 per cent in value terms during 2008.

Venture capital investments accounted for 31 per cent of the private equity deals in volume terms.

While companies based in south India attracted slightly higher number of investments, their peers based in western India attracted a higher share of the pie in value terms.

Among cities, Mumbai-based companies retained the top slot with 105 private equity investments worth USD3.2bn, followed by Delhi/NCR with 74 investments worth USD3bn and Bangalore with 64 investments worth about USD1.3bn. Hyderabad and Chennai followed attracting 35 investments each in 2008.

With 19 investments during the year, Sequoia Capital India overtook Citigroup as the most active private equity investor in India during the year, according to Venture Intelligence.

IFC was the second most active investor during 2008, followed by ICICI Venture and Nalanda Capital with 11 investments each. Other active investors included NEA-Indo US Ventures, DFJ and Nexus India Capital.

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