New PE continues to trickle into 2011 in India. Since Jan almost $3 bln of PE funds have come with a lot of new promoter institutions going for PE funds . However a look at bank credit commentary shows infrastructure and construction lending tapering off and also making it unlikely that 15-30 year funding for infrastructure will be lent an easy hand at the equity markets. On the other hand, the $26 bln outgo in Emerging Market Equities in Q1 2011 has been replaced by $10 bln i n inflows in just the last 3 weeks oin ETFs and almost $3 bln in India portfolio flows invested thence

While a lot of new funds are looking to cement deals for their parked funds in infrastructure and retail lifestyle expansion plays India gets particular attention in both inward investment and outgoing M&A in Pharma and Healthcare. Both markets in drugs and in health insurance are underserved inside the country and the talent and local promoters' cash makes it easy for outward expansion in Korea, Africa or othernook s and crannies which allow that particular deal size and business benefit that Indian promoted diaspora can bring. Banks are unlikely to suffer NIM reactions from increasing deposits but Corporate lending and fee based lines are likely to get added emphasis here as well. Sectorally, Heatlthcare and Big Pharma flows (Vaccination, Generics, thru Joint marketing with Sun, Biocon) have to use this small window in the initial phases of the next bull run to announce and cultivate larger deals. Whether PE and SWF cash will be able to do the required due diligence is however suspect as this sector is nefariously overpriced in corporate advisory deals etc.

Updates from VCCircle home page show a smattering of PE activity to be proud of:

1. After $100 million in Tikona digital and the debate on WIMAX vs "that other" winning Tech, GS Capital surfaced in Axis Bank, Max Insurance and now Muthoot deals
2. Camlin in the retail lifestyle/education segments makers of scholastic instrument boxes for shool going kids and color markers etc seem to be in the right corner for maximising the premium on their purchase
3. Everstone joins SBI and IDFC in tying up billion plus in indiadeals (Pan India restaurants, Percept, Centrum,Regen, Nashik Vintners) and given the MD ticket to its Real estate and leasing guys
4. Ex Chrys Cap lead Ashish dhawan has followed his heart into Lakshmi foods, while WBCP promoters who exited the sold goods and restarted are looking a t listed ops according to media reports
5. Meanwhile the Sardaars at SRL have also handed over their personal stakes to Fortis, free in pocket and spirit for the next deal

 

Muthoot Finance has raised about Rs 130 crore from 11 cornerstone investors and is currently raising around Rs 275 crores or $70 million in an IPO

 

 

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