Private equity (PE) deal activity in India continued its momentum in the April-June quarter

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of 2010 from the prior quarter, though the total deal value was low­er. In the second quarter of cal­endar year 2010, India saw 57 PE deals at $1.5 billion.

This is the second highest quarterly performance in the previous seven quarters. Although total PE deal size in 2Q2010 was 30 per cent lower compared with the prior quarter, it was 70 per cent higher compared with the average quarterly aggregate PE deals in 2009, says an Ernst & Young.

Both 1Q2010 and 2Q2010 registered deals worth over $1 billion after a subdued 2009, during whi­ch no quarter crossed the $1 billion mark. Also, the aggregate deal value for the first six months of 2010 ($3.5 billion) is now almost equivalent to that of the whole of 2009 ($3.54 billion).

Global PE firms were actively involved in seven of the top ten PE deals in 2Q2010, a continuing trend seen in the previous two quarters. The average PE deal size for 2Q10 was $31 million, a fall of 16 per cent compared with the previous quarter, but an increase of 11 per cent compared with the year-ago period. Small-sized PE deals (about $10 million) continue to dominate PE activity, accounting for 45 per cent of the total deal volumes for 2Q2010. The number of la­rge- and mid-sized PE deals in 2Q2010 almost equaled that in 1Q2010.

In the previous three years, infrastructure has continued to attract significant PE investments, accounting for 28 per cent of total PE deal value in 2Q2010. In terms of deal vo­l­ume, technology has ma­i­ntained its growth trend and has garnered a large number of PE deals in 2Q2010. The education and health care sectors have improved significantly by deal volume, with five and four deals, respectively, in the same quarter.

Domestic PE houses we­re also active in raising Ind­ia-focused funds. Over 15 domestic PE houses either announced or raised funds worth $3 billion in the April-June quarter. While global uncertainty remains, PE activity in India is expected to be higher in 2010 than in 2009, says the report.