PE investments in listed firms suffer loss of $1.

27 billion
Press Trust Of India / New Delhi October 8, 2008, 0:31 IST

The meltdown in the market and bearish trading sentiments have taken a toll on private equity
investments in the listed firms as these deals have suffered loss to the tune of a whopping $1.27 billion so
far this year, says a report.

An analysis of private investment in public equity (PIPE) in 2008 shows that these deals in the country
have lost suffered a loss of $1.27 billion so far this year.

“The overall till date-return on PIPE deals of 2007 on volume basis is down 24.07% aggregating to a loss
of $1.27 billion on absolute basis,” according to the latest report of NEXGEN Capitals, the merchant-
banking arm of brokerage firm SMC Global Securities.

In 2007 the total investment in PIPE deals were to the tune of $5.29 billion, while the current mark-to-
market value of these deals now stands at $4.02 billion.
VALUE EROSION
MTM
Sector Investment % of loss
value
Media 59 20 66.25
Real estate 308 111 64.12
Infrastructure 1,432 621 56.65
IT & ITeS 191 85 55.18
Healthcare 121 74 38.57
Manufacturing 550 239 56.48
Telecom 1,296 1,584 22.25 (gain)
Figures in $ mn

Wealth creation was highly imbalanced in different sectors. While media and real estate witnessed a
major erosion in value, only telecom space braved the downtrend and managed to post decent returns.

“Only telecom with Bharti stood out the volatile capital market conditions. The investments made in media
and real estate sectors have lost about two-thirds of their value,” the report added.

An analysis of the various sectors shows that media suffered the maximum loss (66.25%) followed by real
estate (64.12%), and infrastructure and IT & ITeS reported loss of 56.65% and 55.18%.