India is most attractive PE destination

India has attracted the highest private equity (PE) investments at $10 billion in 2007 so far in emerging economies including China. Some of the major PE funds operating in India include Temasek Holdings (Pte) Ltd, Blackstone Group, Warburg Pincus, The Carlyle Group, Washington and Actis Capital LLP.

According to advisory firm IndusView, China attracted $8.3 billion during 2007. Whereas China was leading last year with $13 billion, India managed to attract only $7 billion. The real estate and infrastructure sectors have the key contributor to these increasing cash flows. Out $10 billion; about $5 billion came into these sectors. Real estate emerged as the most attractive segment with 26 % share in PE investments in value terms closely followed by telecom.

India’s trajectory in attracting PE has escalated by 51% compounded annually since 1998. PE in the country as a percentage of GDP is 1%. India will require around $500 billion investments in infrastructures to maintain it’s economic growth. This will open up huge an opportunity for foreign investors.