PwC:Investments in India in Q3 ’12 exceeds US$ 2.5 billion

By Rob Starr, Content Manager, Big4.com

Private Equity (PE) firms invested US$ 2.5 billion in India across 97 deals in Q3 of 2012 – compared on Y-o-Y basis. The quarterly PE investments in India increased 4% in terms of value, while deal volumes fell by 20% (US$ 2.4 billion from 121 deals in Q3’11). With 45 deals worth US$ 1.3 billion in Q3 ’12, the IT and ITeS sector maintained it’s position as the leader in both value as well as volume

The findings are part of the third PwC MoneyTree™ India report, a quarterly study of private equity investment activity based on data provided by Venture Intelligence.

The IT and ITeS sector has seen the highest level of PE funding and the highest number of deals in this reporting quarter. It attracted investments worth US$ 1.3 billion from 45 deals, constituting more than 50% of the total investment value and nearly 47% of the total number of deals in this quarter. The average deal size for the sector too has shown an increase from US$ 13 million in Q3’11 to US$ 29 million in this quarter.

PE investment in the Manufacturing sector also showed over four times growth in value, while the deal volume remained constant. The sector put in US$ 215 million from eight deals in this quarter as compared to an investment of US$ 53 million from eight deals in the same quarter last year. The recent policies of the Indian government to boost investor confidence, the relatively attractive valuations and confidence of investors in the country’s long-term growth potential, has provided an opportunity for private equity players to invest in some niche manufacturing entities.