The Hindu Business Line : ‘Venture capital, PE deals to touch Rs 70,000 cr by 2009’

Eyeing a chunk of the India pie, venture capitalists and private equity players will strike deals worth $17.5 billion (Rs 70,000 crore) by 2009. This is a three-fold jump from $5.5 billion at the end of the first half in 2007, predicts a new study from market research firm Evalueserve.

Consequently, the total number of deals would soar to 560 as private equity players put in funds into the new engines of growth that drive the Indian economy.

The paper mentions that 173 deals have been struck by the end of the first half of 2007.

New areas

Evalueserve forecasts that beyond the technology-sector focused activity that has driven PE investments in the past, private equity and venture capital firms are now aggressively looking to invest in new areas such as manufacturing, financial services, healthcare, real estate, and construction.

Currently, there are more than 366 private equity/venture capital firms operating in the country. The white paper titled ‘An Indispensable Guide to Equity Investment in India’ further states that private equity funding could swell to $20 billion by 2010 as India may house another 69 such firms.

Investment link

In total, these private equity firms will amass $48 billion earmarked for investment in India between July 2007 and December 2010. “Several firms that we talked to mentioned they would be willing to invest even more if they saw good investment opportunities. This stands in stark contrast to 1996, when Indian companies only received a total of $20 million,” the author of the white paper, Dr Alok Aggarwal, Chairman and Founder of Evalueserve, has stated.

If Indian companies do receive $20 billion in funding in 2010, this would represent a stunning thousand-fold increase over a period of 14 years, he added.

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