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PIPE deals of 2007 see huge erosion in value: Media, Infrastructure and Manufacturing most affected

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PIPE deals means deals involving Private Investment into Public Equity. That is, a private deal of shares in a public listed company. PIPE deals are typically done to infuse large blocks of fresh capital into the company or to the issuer (promoter).

In 2007, PIPE investments in India totaled USD 5.9 billions, across a total of 60 deals, with manufacturing leading the pack with 16, followed by BFSI (Banking Financial Services and Insurance) with 13 deals and IT/ITES (Information Technology Enabled Services) with 8 deals.

Data source - NEXTGEN Capitals

Investment levels into these sectors told a slightly different story, with Infrastructure leading with USD 1432 millions in total investments, followed by Telecom, where there was only a single deal - Temasek Holding's investment in Airtel was USD 1295.56 millions! BFSI came third with USD 1284 millions in investments.

That was the good part of the story.

Fast forward a year ahead to October 2008 and lets see where those investments stand.Given the overall mayhem in the markets, all sectors have lost value; some more than the others.

 

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Note: This graph shows value loss as on October 2008, and not current value

Telecom - single deal, Airtel - has been thebest off with just a 21.79% erosion in value. The next best of the sectors is BFSI with a 34.6 % loss, followed by Healthcare with a 54.5 % value loss. At the other end of the spectrum are Media, Infrustructure and Manufacturing.

 

Comments (2)Add Comment
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written by silly bandz, August 28, 2010
power balance
zhu zhu pets
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written by nimesh, January 21, 2010
some graph or table is corrupted or has wrong scripting
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