PE investment in India at $3.3 bn in January-March

"The amount invested by PE firms in Q1, 2011, was the highest since Q1, 2008," Venture Intelligence MD and CEO Arun Natarajan said.

The total deal count also increased to 83 equity deals in the first quarter of 2011 from 81 deals in the year-ago period.

"Successful raising of new PE funds and the accelerated pace of investments in the manufacturing and infrastructure sectors indicates strong revival in confidence for deploying long-term PE capital in the country," Natarajan added.

Energy, construction manufacturing and banking, financial services and insurance industries (BFSI) were the most targeted sectors during the quarter.

"Led by big-tickets investments from infrastructure funds like the 3i India Infrastructure fund and the SBI-Macquarie fund, the energy and engineering and construction industries attracted the most dollars after manufacturing and BFSI," the report noted.

In terms of the number of deals, the IT and ITES industry witnessed 21 deals worth USD 577 million, followed by manufacturing (13 deals worth USD 1.08 billion) and BFSI (seven deals worth USD 423 million).

The largest PE investment during the quarter to March was the Rs 4,500 crore commitment by Bain Capital and Singapore's GIC to Hero Investments, the Hero group holding firm which is to buy out Honda Motors' 26 per cent stake in listed two-wheeler maker Hero Honda.

This was followed by Apax Partners' USD 375 million investment in iGate to help buy-out fellow listed IT Services firm Patni Computers.

Other top investments included three USD 200 million commitments -- for Hyderabad Airport operator GMR Airport Holdings, road projects firm Isolux Corsan India and non-banking finance firm Indostar Capital Finance.

During the quarter, PE firms obtained exit routes for their investments in 14 Indian companies, including one IPO (of PTC Financial Services). In comparison, there were 34 exits (including 7 IPOs) in the first quarter of the 2010 calendar year.

PE firms generally exit from their investment through buyback of shares by promoters, open market transactions, merger and acquisitions and public offers.

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