Private Equity-Backed Buyout Deals in India from 2006 – 2012 YTD (As of 12th April)

by Jessica Hull

  • 12 Apr 2012
  • PE

In 2011, the number and aggregate value of private equity-backed buyout deals in India reached the highest levels since 2006, with 130 deals valued at $7.2bn. The path previous to this point has been unsteady, with the previous peak being recorded during the boom period in 2007, which witnessed 63 transactions recorded with an aggregate value of $3.4bn, just 50% of the peak seen last year. Due to the onset of financial crisis, the number of deals fell by half and the aggregate value of deals fell by just over 60%.

Since 2009, the recovery of deals activity in India has been incredibly strong, with the number and aggregate value of transactions increasing over four-fold. This suggests that fund managers are increasingly looking to India for investment opportunities and are shifting from western economies, which currently appears riskier due to ongoing financial market volatility and the European sovereign debt crisis. It is likely that this deals trajectory will continue, as in 2012 YTD there have been 54 buyouts in India valued at $4.8bn, which already surpasses the peak witnessed in the private equity boom era. Investment into India can be compelling for fund managers due to several factors, due to the country’s high economic growth, large population, good demographics, robust financial sector and the entrepreneurial strength of the population.

In 2011 - 2012 YTD, the greatest number of private equity-backed buyout deals completed in India have been in the industrials sector, with over a quarter of deals representing just under a fifth of the total deal value for the period. This is closely followed by business services and consumer and retail industries, which contributed 20% and 17% of buyout deals in India respectively, with a combined proportional aggregate value of 21%. Buyouts in the information technology and telecoms and media industries only contributed 12% of the number of deals in India from last year to the present, yet contributed 42% of the aggregate value. This could be largely due to the top two largest deals from 2011 - 2012 YTD classifying under these industries. In February 2012, Blackstone Group and Carlyle Group announced the acquisition of Reliance Infratel, an independent wireless towers company from Reliance Communications Limited for $2.965bn. Another notable deal  completed in this period was the $1.2bn PIPE investment into iGate Patni, a provider of information technology services and business solutions from Apax Partners and iGate.

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