Friday, August 17, 2007
Private Equity Funds & India Infrastructure - PE Deals in Infra Sector
PE funds & India Infrastructure Story
Aug 2007
For the first time, India has crossed China in terms of PE investments in the first six months of 2007. According to data from the Centre for Asia Private Equity Research, India has seen $3.7 billion worth of private equity investments, just behind Japan, which saw $4.91 billion worth of PE funding in the same period, and ahead of People’s Republic of China, which saw investments to the extent of $2.6 billion during the first half of 2007.
It is estimated that engineering and construction companies attracted 11 such deals worth $290 million between January and May 2007.
The nature of infrastructure investments presents challenges to the PE investment funding. Infrastructure projects are characterised by high initial set up cost, long project tenors and returns spread over a large number of years. More importantly, the funding requirements for a typical greenfield infrastructure project are of a very different nature compared to typical PE investments.
Typically, PE funds prefer to channelise their funding in this sector through construction or development companies implementing such projects, rather than the projects itself.
Read more from this report @ Economic Times, India
Aug 2007
For the first time, India has crossed China in terms of PE investments in the first six months of 2007. According to data from the Centre for Asia Private Equity Research, India has seen $3.7 billion worth of private equity investments, just behind Japan, which saw $4.91 billion worth of PE funding in the same period, and ahead of People’s Republic of China, which saw investments to the extent of $2.6 billion during the first half of 2007.
It is estimated that engineering and construction companies attracted 11 such deals worth $290 million between January and May 2007.
The nature of infrastructure investments presents challenges to the PE investment funding. Infrastructure projects are characterised by high initial set up cost, long project tenors and returns spread over a large number of years. More importantly, the funding requirements for a typical greenfield infrastructure project are of a very different nature compared to typical PE investments.
Typically, PE funds prefer to channelise their funding in this sector through construction or development companies implementing such projects, rather than the projects itself.
Read more from this report @ Economic Times, India
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