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Mumbai: There's a bright side to the dip in private equity and venture capital investments in Indian companies in 2008; investments in the clean technology sector saw an increase, thanks to global interest in alternative and green energy.
According to data from Venture Intelligence, in 2008, about 15 deals worth $604 million were struck in the renewable energy segment, which is one of the major areas in the cleantech sector. In comparison, 8 deals worth $218 million and 3 deals worth $121 million were struck in 2007 and 2006 respectively in the segment.
Last year, IDFC PE, the major investor in cleantech, entered into three deals: it co-invested $100 million in Moser Baer PhotoVoltaic; it invested $91 million in SE Forge Ltd, a components manufacturing subsidiary of Suzlon; and $10 million in carbon credit advisory firm Emergent Ventures.
Luis Miranda, CEO, IDFC PE, said, "The decreasing cost in production of clean energy such as solar power and wind power attracts more investments." According to him, though there is a possibility of slowdown in overall PE investments in 2009, initiatives by Obama's government will reflect in cleantech investments in India.
Among other investors in the cleantech sector, Helion Venture Partners, along with Foundation Capital, invested in Azure Power, an independent solar power producer in November. Sanjeev Aggarwal, managing director and investment advisor, Helion Venture Partners, says that 2009 will see more solar energy generation; it could reach 20-30 mw from the current 2 mw. "Government initiatives promoting solar power will make the sector attractive for further investments," he said. Among others, Orient Green Power Ltd, a renewable energy company, raised $55 million from Olympus Capital. Also, Kleiner Perkins Caufield & Byers (KPCB), Silicon Valley's leading venture fund, along with Sherpalo Ventures, invested $8 million in renewable energy company Kotak Urja Pvt Ltd. In September, Nexus India Capital invested in Sedemac Mechatronics, a provider of energy efficiency solutions for the automotive and renewable energy markets. Arun Natarajan, CEO, Venture Intelligence, said, "Investors from US, the biggest oil-consuming country, are investing largely in Indian cleantech firms, especially in the alternative fuels and energy segments."
CG Srividya, partner, Specialist Advisory Services, Grant Thornton, said, “Investment in cleantech power segments as a proportion of all power and energy deals in 2008 was over 10% in value and over 50% in volume terms."
During the year, Delhi-based e-waste management company Attero Recycling Pvt Ltd also raised funds from Draper Fisher Jurvetson and NEA IndoUS Ventures. Kam-Avida Enviro Engineers, a waste management equipment manufacturer, also raised funds from Peepul Capital during the year."We expect to see a growth in investments in the sector, considering increased awareness and focus, as well as various measures proposed by the government," Srividya noted.
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