Investments made by private equity funds through the pipe or private investment in public enterprise route has seen erosion to the extent of 16.08% in value till the mid-July. According to a study carried out by Nexgen Capitals, private equity players could have well lost around $85 billion or Rs 3,655 crore.
However, not all the returns have been negative, investments in the banking sector, telecom and retail have reported positive returns. According to the report, ?The wealth creation is highly imbalanced in different sectors. BFSI, Telecom and Retail sectors with HDFC, Bharti and Provogue deals stood out the volatile capital market conditions.?
Overall, while the returns on the market have been dismal, the operational performance of companies where investments have been made has been steady.
?Though Pipe deals performance in IT & ITeS sector has disappointed the capital markets, the companies? but overall financial performance is still encouraging despite volatile forex market,? says the report.
In infrastructure sector, the reasons for sharp decline in the current values of Pipe deals of 2007 of about 52% is more to do with the capital market perception.