PE activity improves in June with highest investment of $763 million over the last 12 months

The Economic Times presents the 'ET-EY PE Deal Watch', a monthly round-up of deal activities in the country, complied exclusively by Ernst & Young. The column will appear in th efirst week of each month.

PE deal value announced during June 2012 was the highest amongst the last 12 months, a significant improvement from the previous month that recorded the lowest value of investment for the past year.

Fund raising activity also improved with five funds announcing closure of aggregate value of $445 million. There was an improvement in the exit activity as well with 9 non-IPO exits almost double than last month.

Investments
June 2012 witnessed PE investments worth $763 million across 35 deals, nearly double of the total investment value announced during the previous month. Though the number of deals has increased merely by 10%, the value of investments increased significantly.

There were three large-ticket transactions (more than $50 million) in June 2012 compared to just one such transaction in the previous month. The month also witnessed an uptick in the PIPE ( Private Investments in Public Entity) deals.

There were eight PIPE deals compared to five in the previous month. However, the numbers for June 2012 are still much lower than June 2011 wherein 44 deals aggregated close to $1.3 billion.

The difference is primarily due to few large ticket transactions. During June 2011, just six deals clocked $764 million, similar to the total value of investment during June 2012.

Infrastructure led the pack with the highest value of investments during the month. This was on account of Morgan Stanley's investment of $210 million in Continuum Energy.

In terms of deal activity, Technology and Retail & Consumer Products sectors continue to be the leaders for the third consecutive month with eight and six deals respectively.

Fund raising
Fund raising activity also showed improved signs compared to the previous month.

There were five successful funds raised during the month, of which the significant ones are as follows: $182 million raised by ASK Property Investment Advisor for its Special Opportunity Fund II; $127 million by Global Environment Fund; $87 million by Motilal Oswal PE for its second PE fund, the India Business Excellence Fund II.

There were three new fund raising plans announcements - the major one being the real estate focused fund worth $500 million by IDFC PE.

Pe-backed IPOs and exits
There were nine non-IPO exits this month, nearly double of that in the previous month.

Of the nine non-IPO exits, six were through open market, two by secondary sale to other PE investors and one through strategic sale. There were no PE backed IPOs during June 2012 reflecting the nonexistent capital markets activity.