Sectors likely to attract maximum number of PE-VC transactions are clean-tech, consumer products & services, microfinance, mobile VAS & consumer Internet, aerospace, defence and the rural & healthcare space
Big-ticket deals in the private equity (PE) and venture capital (VC) space are likely to make a comeback this year as the downturn has made valuations more realistic and economic conditions are showing signs of stability, believe experts.
"There is definitely an upturn in terms of the quality of deals in the recent past. Besides, the slowdown has brought more sanity and clarity in the investing scenario with valuations of companies (the) world over plummeting last year due to an adverse impact on their fund-raising plans," Reliance Venture Asset Management chief executive Harshal J Shah told PTI.
Echoing a similar view, VCCEdge research director Rohit Madan said, "There was an aura of uncertainty which is now lifting. It was more about sustenance than expansion. As economic conditions stabilise and credit markets return, funds are coming back to the table and looking at new deals."
According to VCCEdge, the financial research platform of VCCircle.Com, private equity investments in India in the first two months of this year stood at $465 million. Meanwhile, the total number of VC investments announced during February this year stood at three amounting to $11 million as against eight deals worth $31.10 million in the year-ago period.
Elaborating further, Mr Shah said that the market was seeing a lot of good and valuable deals coming at the 'right valuations'.
Besides, the quality of deals improved because the downturn has made valuations more realistic and has resulted in manageable expectations among entrepreneurs and investors in terms of executing business plans, he added.
"I see a lot more conservative but realistic valuations and a greater deal flow in 2010 as compared to 2009," Mr Shah said.
VCCEdge's Mr Madan believes that though there will definitely be some big-ticket deals in the coming months, it is unlikely that they will match up to 2007 or even 2008 levels.
The sectors that are likely to attract maximum number of PE-VC transactions are—clean-tech, consumer products & services, microfinance, mobile VAS & consumer Internet, aerospace, defence, rural and healthcare space.
However, SMC Capitals equity head Jagannadham Thunuguntla said, "The deal volume may remain lacklustre in the near future, as valuations have stretched on the back of strong capital market rally and PE investors are unable to match up to that speed."
Officials from telecom company S Tel, which has been asked to stop services due to national security concerns, have met telecom minister A Raja to resolve the issue
Officials from telecom company S Tel, which has been asked to stop services due to national security concerns, on Monday met telecom minister A Raja to resolve the issue, reports PTI.
S Tel, which offers mobile services in three circles of Himachal Pradesh, Bihar and Orissa, was asked to stop operations last week as it is yet to get security clearance from the Intelligence Bureau (IB).
The IB nod is a must for any telecom firm to start services, senior officials in the Department of Telecom said, adding that the matter was likely to be resolved soon as there was no other concern except pending security clearance.
However, when contacted, S Tel said that services to its existing customers were still functional and the company was hopeful that the matter would be resolved soon.
The company has licences for three more circles of Jharkhand, Jammu & Kashmir and Assam, but is yet to start services there.
Bahrain Telecommunications Company (Batelco), which has 42.7% stake in S Tel, has entered into a partnership with Islamic investment bank Global Banking Corporation (GBC), which has acquired 11% stake in S Tel for $50 million. GBC’s buying 11% in S Tel will indirectly raise Batelco's stake in S Stel by 6.3%.
In developing nations, women's earned income is growing at 8.1%, compared to 5.8% for men. Globally, women control nearly $12 trillion of the $18 trillion total overall consumer spending, a figure predicted to rise to $15 trillion by 2014.