TRESVISTA FINANCIAL SERVICES
and unique business culture. Contrast to 2009, when
Indian deal value saw the region’s biggest decline, India
saw the largest increase in deal activity among the big
Asia-Pacific markets in 2011. Total deal value more than
doubled in 2010 to $8.2bn, and the number of deals rose
to 362. Nearly every major sector of the Indian economy
participated in the strong deal-making recovery, with the
energy sector attracting the most capital.
With financial crisis affecting the global economy and
domestic concerns, industry participants have had
to tackle with significant new challenges. With that,
PE firms are now aware that they need to reassess
their strategies and how they can continue to deliver
superior returns especially when the traditional drivers
of the past such as GDP growth, multiple expansions,
and ready availability of capital, no longer provide the
lift they once did; by increasing investments in India.
PE firms invested $10,117.0mn over 441 deals in India
during 2011, compared to $8,187.0mn across 362 deals
during the previous year taking the total investments
by PE firms over the past five years to about $47.0bn
across 2,062 transactions.
Why PIPEs
PE funds, which mostly invest in private companies, are
buying stakes in listed companies trading at attractive
prices, as the downturn in stock markets in the recent
past has brought down valuations of companies offering
significant investment opportunities for PE firms. PIPE
is seen as one of the most attractive markets for qualified
individual investors and accredited institutional funds.
A PIPE deal is a directly negotiated transaction between
an accredited investor and an issuer, a public listed
company. PE firms prefer PIPEs as these allow the funds
to sell their investments in just a year or two, compared
with the average four-five year wait for exits in privately
held firms. Also, PIPE investments are attractive as
corporate governance, transparenc 䁅