India saw its private equity market double in size last year, according to figures from Dealtracker, a division of global accounting firm Grant Thornton.
The report found that private equity investments totalled $2 billion (€1.7 billion) in 124 deals in 2005, compared with $1.1 billion in 60 transactions during the previous year.
The average value of these transactions rose 85 percent in 2005, with ten completed deals worth more than $50 million.
The most popular sector for investors in India during last year was pharma/healthcare/biotech, which accounted for $374 million of investment in 19 deals, giving it an 18.4 percent market share. IT accounted for 12 percent of total deal value, automotive 9.6 percent, and banking/financial services 9.1 percent.
The IT sector recorded the most deals in 2005 (22), followed respectively by pharma/healthcare/biotech, banking/financial services, textiles/apparel, and media/entertainment.
The report noted that significant developments in Indian private equity over the last year included: a focus on larger and more mature deals including PIPE deals; several funds looking for buyouts/change of ownership situations; an increase in international funds setting up operations in India; and greater fund allocations to India.
Harish HV, head of M&A at Dealtracker, indicated in a statement that he saw a further increase in activity ahead: “The private equity sector is expected to see more activity, with funds like Draper [Fisher Jurvetson] planning to invest over $200 million in India over the next five years and Oak Investment Partners planning to start a $200 million specialised retail fund in India.”
The Indian M&A market as a whole saw greatly increased activity last year, with $13 billion invested in 245 deals in the first 11 months of 2005 – compared with $9.5 billion in 237 deals in the whole of 2004.
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