Real estate ruled in 2007. A look at the potential target sectors for 2008
After getting a brief idea about ‘what lies beneath’
and ‘what’s on surface’ the time has come to get a hang of ‘what lies ahead’. Amidst the rollicking PE investments that are sweeping various sectors of the Indian economy, one truth stands out for sure – the ‘sunrises’ of today might be the ‘twilights’ of tomorrow! And as we say this, we dare to add the natural truth that most definitely, some new sector(s) will lead the lap in the race to woo investors. Here’s a primer…
Statistics reveal that the year 2007 was ruled by sectors like real estate and telecom that counted first when it came to the PE favourites category. And this comes as a no surprise as it fell quite in line with the promises that these two sectors held. Therefore, investments in companies like GMR Infrastructure and Bharti Airtel were some of the noteworthy deals in these above mentioned sectors. In terms of percentage value share for the year 2007, sectors like real estate & infrastructure management led the pack, attracting 36% of the net investment share. It was followed by others like Telecom, Banking & Financial services, Media, Entertainment & Publishing and IT & ITeS, which garnered 18%, 17%, 5% and 4% of the total pie respectively. And now talking about what’s bound to happen in the future, let’s consider the following figures. According to a PE firm, SMC, “There are 366 firms claiming to be operating in India and another 69 that are raising capital with plans to be operating soon. Approximately, over 400 funds are active or about to be active in Indian markets. In total, they seem to be sitting on $48 billion to be invested between now and December 10, 2008.” What this clearly proves is that there is no dearth of money flowing into India through the PE route. However, which are the target sectors for these deeppocketed sharpshooters is still a critical and cloudy question to ponder over.
Sudhir Gupta of Planman Financial feels that, “Sectors like education, especially e-education, will rake in big PE money in the coming future. Then there are also other sectors like healthcare, which will also attract huge PE investments.” Well, believe it or not, from career counseling to preparatory tutorials to vocational training companies, education is one of the sectors, which is enticing PE firms big time. 2007 was a great year for healthcare and it seems it will of course remain in vogue. The year saw a whopping $400 million being poured into this sector, and this fad is still far from becoming history. Currently pegged at $34 billion, the healthcare sector is expected to grow to a whopping $40 billion by 2010. “We are certainly looking at buyout opportunities in the domestic pharmaceutical space this year,” opines Sanjiv Kaul, Managing Director, Chryscapital Infrastructure. Sure enough, a look at the figures would prove that the pharma industry has also been a roaring success amongst the money-laden PE firms.
After getting a brief idea about ‘what lies beneath’
and ‘what’s on surface’ the time has come to get a hang of ‘what lies ahead’. Amidst the rollicking PE investments that are sweeping various sectors of the Indian economy, one truth stands out for sure – the ‘sunrises’ of today might be the ‘twilights’ of tomorrow! And as we say this, we dare to add the natural truth that most definitely, some new sector(s) will lead the lap in the race to woo investors. Here’s a primer…Statistics reveal that the year 2007 was ruled by sectors like real estate and telecom that counted first when it came to the PE favourites category. And this comes as a no surprise as it fell quite in line with the promises that these two sectors held. Therefore, investments in companies like GMR Infrastructure and Bharti Airtel were some of the noteworthy deals in these above mentioned sectors. In terms of percentage value share for the year 2007, sectors like real estate & infrastructure management led the pack, attracting 36% of the net investment share. It was followed by others like Telecom, Banking & Financial services, Media, Entertainment & Publishing and IT & ITeS, which garnered 18%, 17%, 5% and 4% of the total pie respectively. And now talking about what’s bound to happen in the future, let’s consider the following figures. According to a PE firm, SMC, “There are 366 firms claiming to be operating in India and another 69 that are raising capital with plans to be operating soon. Approximately, over 400 funds are active or about to be active in Indian markets. In total, they seem to be sitting on $48 billion to be invested between now and December 10, 2008.” What this clearly proves is that there is no dearth of money flowing into India through the PE route. However, which are the target sectors for these deeppocketed sharpshooters is still a critical and cloudy question to ponder over.
Sudhir Gupta of Planman Financial feels that, “Sectors like education, especially e-education, will rake in big PE money in the coming future. Then there are also other sectors like healthcare, which will also attract huge PE investments.” Well, believe it or not, from career counseling to preparatory tutorials to vocational training companies, education is one of the sectors, which is enticing PE firms big time. 2007 was a great year for healthcare and it seems it will of course remain in vogue. The year saw a whopping $400 million being poured into this sector, and this fad is still far from becoming history. Currently pegged at $34 billion, the healthcare sector is expected to grow to a whopping $40 billion by 2010. “We are certainly looking at buyout opportunities in the domestic pharmaceutical space this year,” opines Sanjiv Kaul, Managing Director, Chryscapital Infrastructure. Sure enough, a look at the figures would prove that the pharma industry has also been a roaring success amongst the money-laden PE firms.
