PE investments likely to cross USD 7 bn in 2010: E and Y

"PE investments are expected to touch USD 6.5 billion in 2010 up from USD 3.5 billion in 2009," Ernst & Young's Partner (Private Equity) Mayank Rastogi told PTI.

"This number may well cross the USD 7 billion-mark if some of the large ticket deals which are currently in works may get announced in the last week of December 2010," he said.

Sectors such as power and transportation, infrastructure ancillaries, consumer and branded products, health care, education and financial services, are expected to increased PE activities next year.

"Exits are likely to become a mainstream activity as the funds turn a full investment cycle in India... Secondary deal activity is expected to increase with significant exits expected over next 12 to 18 months," he said.

According to him, exit activities by PE players rose in 2010, driven by three factors -- vintage of PE investments in India, healthy capital markets performance and developing secondaries market.

"In 2010, PE firms recorded more than 80 exits at USD 5.5 billion - comprising IPOs, strategic sales, buybacks and secondary deals. This exit performance was the strongest ever in the history of PE in India," Rastogi pointed out.

Leaving behind the overall slowdown in 2009, PE market has witnessed increased activities this year. Sluggish global economy coupled with good domestic growth prospects driving fund managers to park their money in Indian market.

"Year 2010 clearly saw an uptick in the PE market in India... Whilst the year saw some big investments in the Power and Infrastructure sectors, notable amount of capital was deployed in telecom, financial services, consumer products, health care, technology and education," Rastogi said.

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