“The average deal sizes went up and valuations increased considerably. After the dotcom phase, both valuations and quantum of investments dipped and there was a marked trend towards investing in later stage ventures, businesses with track record, PIPE (Private Investments in Public Enterprises) deals, non-technology businesses etc,” it said.

This period has also seen a consolidation in the industry with several unsuccessful funds closing down. Many of the PE firms — like BPEP India, UTI Ventures, ICICI Ventures, Sequoia Capital etc — have raised their second or third round of funding with much larger corpuses. Several international funds — like 3i Capital, Matrix Partners, Blackstone Ventures, Temasek Capital and many more — have established a presence in India with large fund sizes dedicated to India.

According to Merrill Lynch, one of the most important markets for investors this year has been India. "Foreign investors poured in close to $8.5 billion helping to push the index to an all-time high, and deliver US dollar returns of almost 42 per cent. By the end of the year this had left Indian equities also trading at a near record premium of 30 per cent to the region," it said.

Tech funds top in Dec returns

MUMBAI: Indian equity funds investing in technology stocks topped the returns chart in December on the back of robust growth in mid-cap stocks, but banking funds suffered losses, data from fund tracking firm Lipper showed. IT funds gave returns in the range of 4.71-11.35 percent over the month, beating the 3.24 percent gain of sector benchmark BSE IT index, data from Lipper showed. “In the last one month, mid-cap tech stocks have outperformed the large-cap tech stocks,” Anup Maheshwari, head of equities, DSP Merrill Lynch Fund Managers Ltd said. Technology funds with good exposure to mid-cap and small-cap stocks gained from the outperformance, he said. — Reuters