India Q2 private equity investments boosted by KKR deal

Private equity firms have invested $2.1 billion in India in the quarter ending June 2006, a figure boosted by Kohlberg Kravis Roberts’s $900 million acquisition of Flextronics Software Systems, according to Venture Intelligence India, a data provider.

Without the KKR deal, investments by private equity and venture firms in India increased by more than three times over the same period the previous year when the industry invested $407 million.

In the second quarter 76 deals were concluded, slightly more than 69 in the previous three months, and well above the 40 deals in the second quarter a year ago, according to Venture Intelligence India.

In the first six months of 2006, total investments by private equity investors reached $3.5 billion, surpassing the $2.2 billion invested for the entire 2005, Venture Intelligence data showed.

The focus on investments in late stage and listed companies has remained consistent, which accounted for 60 percent of all private equity deals in the latest quarter, the data showed.

Arun Nataranjan, editor of Venture Intelligence, said that a recent correction in India’s stock market will keep expectations of private companies seeking capital in check.

Nataranjan said: “Given that the main competition to private equity in India over the last 18 months have been the public market, the correction is likely to encourage some PE investors, who chose not to participate in the highly competitive late-stage segment over the past few months, to become more active now.”