Checking out

PE firms make some high-profile exits.

The private equity (PE) Market in India has been on a high for some time now. In the first nine months, some $8 billion worth of investments have taken place as against $11.7 billion in the whole of last year. What’s, however, gone unnoticed is the spree of exits by PE players.

Till million (Rs 2,410.8 crore) worth of exit transactions have taken place. And industry executives expect that figure to climb to over $1 billion by the calendar year-end. This, however, would still be lower than the exits in 2005, totally worth $3.2 billion. In 2006, total exits were to the tune of $589 million. Till date there have been eight this year, as against nine for the whole of last year and 10 exits in 2005. (These exits do not include those by early-stage venture capital investors).

Says Alok Sama, Founder and President, Baer Capital, an Investment Management, Corporate Finance and Wealth Advisory company: “Many PE firms are nearing the end of their first investing cycle in India and have simultaneously (as they exit) started allocating or raising fresh funds for investment here.” Adds Gopal Jain, Partner and Founder, Gaja Capital Partners, a Mumbaibased private equity firm that provides growth capital to midmarket companies: “The right time to exit depends on a number of factors. One of these factors is the prevailing financial market conditions.There are two aspects to market conditions—the private market condition led largely by M&A activity and public market conditions led by primary and secondary markets. Currently in India both these market conditions are extremely favourable.”

Data culled by BT from industry players reveals that the exits of 2007 have been either through strategic stake sales, known as trade sales in PE jargon, or secondary market transactions. ICICI Venture Funds Management Co made three significant exits worth $161 million (Rs 644 crore) in 2007.