Private-equity (PE) firms invested $2.9 billion across 112 deals during the quarter ended June 2011. This is a 45 per cent increase over $1.9 billion invested across 70 deals in the same period in the last financial year.

However, the investment in the second quarter was 15 per cent lower sequentially ($3.3 billion across 91 deals), according to a report by Venture Intelligence, a Chennai-based research service.

IT and ITeS lead

The information technology and IT-enabled services (IT and ITeS) industry received the most number of investments during the second quarter at 34 deals worth $325 million, followed by the banking, financial services and insurance industry (BFSI) with 12 deals worth $275 million.

Led by the $45-million investment in online travel services firm Yatra Online, the IT and ITeS industry attracted six investments of $20 million or more.

The BFSI industry was led by three preferential allotments by listed firms: $98 million by leasing firm Magma Fincorp, $65 million by Dhanlaxmi Bank and $43.80 million by ING Vysya Bank. Led by the Rs 65-crore ($14.4-million) third round of funding for Janalakshmi Financial Services, the microfinance sector staged a comeback during the period, the report said.

Infrastructure

Infrastructure-related sectors accounted for 34 per cent of the investments by value (16 per cent by volume). In the energy industry, apart from Diligent Power, two renewable-power producers raised rounds of over $20 million. The manufacturing industry remained attractive with 11 investments worth about $490 million.

Among consumer-spending themes, the food and beverage industry attracted special attention from PE investors during the second quarter with significantly sized investments in Devyani International (which runs KFC, Pizza Hut and Costa Coffee chains in various parts of India), Sagar Ratna (a restaurant chain in North India serving South Indian Cuisine) and Prakash Snacks (a maker of potato chips and snacks).

Largest investment

The largest PE investment during the second quarter was the around $500-million commitment by Apollo Management to group companies of the manufacturing- and infrastructure-focused Welspun Group. Other top investments included commitments of about $150 million each for thermal power generation firm Diligent Power (by Warburg Pincus), hotel-management and investment firm Samhi Hotels (by GTI Group) and airports operator GMR Airport Holdings (by StanChart PE, Old Lane and JM Financial), the report said.

Exits

PE firms exited investments in 15 Indian companies during the second quarter, including an initial public offering(IPO) (Sequans Communcations). This compares to 25 exits (including 4 IPOs) in the same period in financial year 2010 and 16 exits (including an IPO) in the last quarter.

Reliance Venture exited from France-based 4G chipmaker Sequans Communications via the company's listing on New York Stock Exchange. Among exits via mergers and acquisitions, the acquisition of BPO firm Intelenet for ₤385 million ($632.5 million) by Serco provided Blackstone its first exit in India.

Real estate

PE realty firms made 15 investments amounting to $504 million across 10 deals with disclosed values during the quarter ended June 2011. The pace of investments during the quarter was higher than that during the same period in the past year, which witnessed nine investments with $377 million being invested across eight deals with disclosed values, said the report.

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