The Hindu Business Line : `PE investors favour mfg industry'

Private equity firms invested about $2.1 billion in 76 deals during the quarter ended June 2006, according to a study by Venture Intelligence, a Chennai-based information and research service focused on private equity in India.

The amount invested during the latest quarter was five times higher than the same period last year during which 40 deals totalling $407 million happened, and 1.5 times more than January-March 2006 quarter with a total investment of $1.3 billion in 69 deals.

Total investments by private equity investors during the first six months of 2006 touched $3.5 billion — 1.6 times more than $2.2 billion invested in entire 2005, the study said.

With 17 deals worth about $200 million, manufacturing overtook the information technology and IT-enabled services as the favourite industry among private equity investors during the latest quarter.

Engineering and construction companies emerged as the third most favourite industry attracting $372 million across 13 deals. Other industries that witnessed significant interest during the quarter included banking and financial services and food and beverages.

Focus on listed cos

The June quarter witnessed a strong focus on investments in late stage and listed companies. These two categories together accounted for 60 per cent of all private equity deals in the latest quarter compared to the 49 per cent in the immediate previous quarter, the study said.

However, the number of late stage, including pre-IPO, deals overtook the number of private investment in public enterprises deals during the latest quarter. Early and growth stage companies accounted for 30 per cent of private equity deals (in volume terms) during the period, the study said.

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