Data from Venture Intelligence shows that private equity (PE) players invested $8.9 billion over 406 deals in India during 2012 compared with $10.4 billion across 483 deals the previous year, which is a fall of 14.7 per cent.
The decline in investment is attributed to delays in fund deployment by the PE firms. According to some industry players, PE managers are being more judicious and taking a longer period to deploy their funds. The sluggishness in investment is also attributed to the fact that the environment has continued to be challenging for new fund raising.
It was a challenging business environment for PE firms to raise funds, says a report published by the Chennai-based research service focused on private company transactions and financials. These figures include VC investments and exclude PE investments in real estate.
The total investments by PE firms over the past five years is estimated at about $41.4 billion across 2,036 transactions by the research agency.
The data reveal that PE investments in the last quarter of the year declined over 32 per cent to about $1 billion (across 82 deals) compared with $1.5 billion invested (across 121 deals) in the same quarter in 2011 and $3.9 billion invested (across 108 deals) in the immediate previous quarter.
According to the report, the “Limited PartnersÂ’ interest in Indian PE funds continues to be lukewarm. This would change provided the current rally in public markets results in an exit realisation for PE funds, the report says.