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PE deals of offloading stake nearly halves in 2011

Last Updated: Sunday, January 15, 2012 - 12:32

New Delhi: The number of private equity deals of offloading stakes in Indian companies almost halved to 74 in 2011 mainly due to the ongoing financial uncertainty and market volatility.
During 2011, India Inc saw 74 deals where the PE firms sold their stakes in domestic companies, a decline of 47 percent over the previous year. In 2010, there were 139 such deals, according to the data by deal-tracking firm Venture Intelligence.
"Private Equity firms obtained exit routes for their investments in 74 companies during 2011 (including four via IPOs) - a number which was just half of that in 2010 (which had witnessed 24 PE-backed IPOs and 115 exits via M&A and public market sales)," Venture Intelligence chief executive officer Arun Natarajan said.
Market persons said PE players found it difficult to offload their holdings in companies in 2011 due to high volatility in the stock market.
PE-backed companies raised about USD 221 million via IPOs during 2011.
Some of the major PE backed exits were Macquarie selling a part of its holdings in the USD 98 million IPO of PTC Financial Services and Reliance Venture exiting from France-based 4G chipmaker Sequans Communications via the company's NYSE listing.
Among exits via public market sales, Idea Cellular witnessed the exit of two of its PE investors – ChrysCapital and TA Associates - who had participated in the company's nearly USD 1 billion pre-IPO placement in October 2006.
Moreover, Warburg Pincus sold USD 236 million worth shares in Kotak Mahindra Bank across thee sales in 2011. It also sold a further holding in listed healthcare firm Max India - the latest being sales of shares worth USD 60 million (Rs 308.5 crore) to Goldman Sachs.
PE investors received 16 exits via secondary sales in 2011, compared to 17 such deals in the previous year.
StanChart PE sold its stake in auto-components maker Endurance Technologies as part of a USD 71 million infusion by new investor Actis, while, Axis PE sold its stake in water projects firm Vishwa Infrastructures to new investor Olympus Capital for over Rs 200 crore.
Meanwhile, private equity in real estate (PE-RE) firms made 19 exits during 2011 (of which 14 deals with disclosed values harvested USD 603 million). This compares to a total of just 8 exits announced during 2010.
HDFC Venture - which accounted for five of the exits during 2011 - sold its stake in the Embassy Group's Bangalore IT Park, Manyata Business Park, via a Rs 490 crore buyback deal (funded by Blackstone).
HDFC also exited its two-year-old investment in Nitesh Estates' Bangalore Mall project via a USD 100 million (Rs 450 crore) buyback deal.


First Published: Sunday, January 15, 2012 - 12:32
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