Updated on 12 November 2012
Private equity investments surge substantially in India
The private equity (PE) investments in the Indian life sciences sector, during 2012 (from January until date), recorded a 137 percent growth as compared to that during the last year. According to Venture Intelligence, a Chennai-based research firm, the health and life sciences industry has already received investments worth of $268 million in 2012 as compared to $113 million from 12 deals in 2011. Out of the 15 deals of 2012, top four deals account for $198 million, with the $60 million investment from Equity Partners Fund in Avesthagen, leading at the top of the table.
The surge in investments in the life sciences industry is attributed to the prevailing opportunities in healthcare, drug discovery space, medical devices, and personalized medicine space. Sharing her views on the opportunities, Ms Padmaja Ruparel, president, Indian Angel Network, pointed out, "The abysmal state of healthcare in the country (till a few years ago) provided an opportunity to the entrepreneurs to address the unmet needs. Further, as the bottom of the pyramid comprises of almost two-thirds of population, it provides an opportunity to build products of global quality at Indian prices. This offers vast opportunities to create fast growing ventures, jobs, and wealth and also drive economic growth."
Agreeing to the fact that there is an upsurge in investments in the life sciences sectors, Mr Ashwin Raguraman, vice president, India Innovation Fund, said that, "I think this upsurge is also visible in other sectors such as ICT and further, it is not just the quantity of start-ups, but encouragingly a qualitative improvement in the start-ups and the maturity of their offerings that are emerging in these sectors."
The reasons are common across these sectors. Mr Raguraman elaborated, "There is an entire generation of individuals who went to the West to study and work and have returned in large numbers to India in the last five years armed with global outlook, practices and ideas. Many of them have ventured into entrepreneurship, as the opportunities offered by the large firms often don't measure up to their competence."
"There is also a new breed of entrepreneurs, who are emerging from large corporate, with a deep domain understanding. They understand the gaps in the solution offerings and are willing to provide niche solutions. The third category, yet emerging, is a set of academics, who are converting years of research into business applications and building firms around them. This upsurge is encouraging and, with right enablers, can lead to a whole new breed of companies that will emerge from India," he added.