Private equity (PE) and venture capital (VC) investments are likely to witness significantly higher levels

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of deal closures, both in terms of deal value and volume, from early this year on, according to experts.

Battered by the global financial crisis, VC and PE investments dipped last year, but with improving liquidity conditions, these investments are expected see a major jump.

According to the global consultancy firm Grant Thornton, PE and qualified institutional placement deals till December 13, 2009 amounted to $11.17 billion in the country. "The worst seems to be over for PE investors and clearly there is renewed PE interest in investing in the country, specifically in sectors like education, healthcare, logistics and realty. As a result PE action in 2010 is expected to pick up significantly," PricewaterhouseCoopers executive director and partner transactions group Sanjeev Krishan said.

Ernst & Young partner and national director-industrial & consumer products Pankaj Dhandaria says, "PE investments are on the rise again as is evident from the deal activity, which has picked up speed in the past couple of months. India, which is on a growth trajectory and with its ability to generate relatively superior returns, will attract even higher degree of capital, including PE funds, in the years to come."

"We have been witnessing strong signs of a revival in PE activity in the country since the last quarter of 2009. Our expectation is that this increased activity will result in significantly higher levels of deal closures, both in terms of deal value and volume, from early 2010 onwards," New Silk Route Advisors partner Darius Pandole said, add­ing the recovery is expected to gain strength over the course of 2010.

According to Reliance Technology Ventures chief executive Harshal J Shah, "There will be a lot more conservative but realistic valuations in 2010."

Sectors such as cleantech, consumer products and services, microfinance, mobile VAS and consumer Internet (social media sites driven mostly by user-generated content), aerospace, defense, rural and healthcare areas will attract maximum investments this year in the PE space.

Meanwhile, VC investments touched $366 million till November 2009, said research firm tracking PE and VC investments Venture Intelligence. VC investments in the country is considerably low when compared with the need for such investments here, especially in the rural and tier III cities.

"VC investment needs to move from the metros which are over serviced and move to the hinterlands where great ideas of community well being and self sufficiency need mentoring as well as funding laying a strong foundation for the rural consumer," Krishan added.