India surpasses China with $570 mln PE investment in Q1

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New Delhi, Apr 22 (UNI) The Private Equity (PE) investments in the country has grown to about two times at four billion dollars in the first quarter ended March 31, 2008 surpassing China, that recorded just 570 million dollars of investments so far, a report said today.

India had first achieved the milestone of surpassing China in attracting PE investments towards the end of the second quarter of the calendar year 2007, when it grossed 10 billion dollars compared to China's eight billion dollars.

China received 13 billion dollars in private equity investments in 2006 compared with 7 billion dollars in India during the same period. The equation has changed since then, with India well in the lead now.

The real estate and infrastructure sector in the country has again been the key contributor to this increasing trend this year so far as it emerged favorite with 28 per cent share in value of all private equity investments at 1.12 billion dollars.

The next in line was the Power sector having received about 13 per cent share of the pie with 520 million dollars so far this year.

Banking and Finance and Telecom sectors tied for the third most favorable sectors for investments with 8.7 per cent of the deals at more than 340 million dollars each.

''Globally, real estate and infrastructure fundraising by international real estate private equity funds, has been brisk, with as much as 130 billion dollars raised over the last two, according to estimates,'' the report from IndusView, an India-focused cross-border advisory firm said.

A large percentage of these funds raised are focused outside of the US for investing in emerging markets such as India and China, it added.

China will overtake the US by 2025 as the world's largest economy as it's economy is expected to continue to grow to become about 130 per cent the size of the US by 2050, according to the estimates.

India will grow to almost 90 per cent of the size of the US by 2050, while Brazil is expected to overtake Japan by 2050 to move into fourth place. Russia, Mexico and Indonesia all have the potential to have economies larger than those of Germany or the UK, by the middle of this century.

The Indian government has responded to an urgent demand for new infrastructure, announcing that nine per cent of the country's GDP will be spent on infrastructure by 2012, presenting an unprecedented investment opportunity, the statement said.

A renewed interest in the Indian infrastructure sector has seen fresh fund raising of up to eight billion dollars in the pipeline this year with financial entities such as State Bank of India (SBI), Australia-based Macquarie Capital Group Ltd, the UK based private equity firm 3i Group, the US based Blackstone Group among others, chipping in.

A significant share of international real estate funds will find their way in to the Indian real-estate and infrastructure market, which has the capacity to absorb as much as 500 billion dollars over the next five years, according to government estimates.

Global private equity funds such as Temasek Holdings (Pte) Ltd, Blackstone Group LP, Warburg Pincus, The Carlyle Group, Actis Capital LLP, have mapped out investment strategies for the Indian market, the statement added.


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