Venture Capital and PE firms' new found interest in India

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New Delhi, Aug 5 (UNI) A Joint Study by ASSOCHAM and Deloitte has brought out that Venture Capitalists (VCs) and Private Equities (PEs) are likely to infuse a whopping 8.5 billion dollars in the next five years, expanding their horizon from IT to other sectors where the regulatory regime is gradually disappearing.

The sectors which are most favoured for the investments include biotechnology and life sciences, logistics, clean technologies, film production and education.

Entitled 'Indian Venture Capital--A Future Scenario', the Study says VCs and PEs, which for long has been choosing IT for investment purposes, have found huge opportunities in these new areas of interest. The regulatory regime in these sectoprs is also fast withering away.

Biotechnology and life sciences alone will attract about 1.5 billion dollar investments from VCs and PEs by 2012.

Citing an example in this regard, the Study says the US-based Life Sciences Fund has recently invested about 20 million dollars in a Hyderabad-based pharmaceutical company.

Devices and diagnostics are the other areas where investors are active.

Logistics is another area for investment, with a projected investment of more than two billion dollars in India's maritime infrastructure to meet the growing demand for exports and imports.

The Paper says the 'National Maritime Development Programme' envisages huge investments to upgrade India's maritime sector of which 64 per cent is expected to be from VCs and PE firms.

Clean technologies is yet another area where these funds would like to increase their presence.

In 2007, global investors committed 290 million dollars in 11 cleantech investment deals compared to 140 million dollars in nine deals in 2006.

With the government initiatives and policy focus on cleantech, the Study says it was expected that PEs and VCs would be able to jointly garner an investment of 3.5 billion dollars in the areas in the next few years.

The other prospective areas in which VCs and PEs would make huge investments include Indian film production and education.

Currently, the Indian film industry is worth 1.8 billion dollars and is expected to grow by 25 per cent to grow over five billion by 2011.

With the newly accorded status of industry and growing professionalism in the film industry, it will emerge as new avenue for VCs, the Study says.

The Study projects 0.25 billion dollars of VC investments in this industry in the next five years.

With a booming economy and the need for skill upgradation, the Study says a global private equity firm with 36 billion dollars in assets is planning about 200 million dollars investment in the Indian education sector by taking up strategic positions in companies offering e-learning, distant learning and vocational training.

UNI MP SR VC1600

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