Total FDI in April-June, however, soared 31 per cent year-on-year to USD 9.50 billion on the back of higher investment in computer software and hardware, trading, automobile and power sectors.(Reuters)

Country’s services sector witnessed around 14 per cent decline in FDI at USD 636 million (Rs 4,036 crore) in the first quarter of the current fiscal.

The services sector — which includes banking, insurance, outsourcing, R&D, courier and technology testing — had received a foreign direct investment (FDI) of worth USD 738 million (Rs 4,421 crore) during April-June 2014, Department of Industrial Policy and Promotion (DIPP) data showed.

The (services) sector contributes about 60 per cent to the India’s economic growth. In FY 2013-14, foreign investment in the sector increased to USD 3.25 billion from USD 2.22 billion in the preceding fiscal.

The FDI in the sector may pick up in the coming months as the government has relaxed norms in insurance and other areas, an official said.

Introduction of composite cap concept may also help in attracting portfolio investments in the sector.

Other sectors that recorded decline in foreign investment during the first three months of this fiscal include construction development, telecommunication, pharmaceuticals and metallurgical industries.

Total FDI in April-June, however, soared 31 per cent year-on-year to USD 9.50 billion on the back of higher investment in computer software and hardware, trading, automobile and power sectors.

Foreign investments are considered crucial for India, which needs around USD 1 trillion over five years to overhaul its infrastructure sector such as ports, airports and highways to boost growth.

Major PE deals in July include TA Associates and India Value Fund Advisors’ investment of around USD 500 million in broadband services provider Atria Convergence Technologies (ACT) and Warburg Pincus’ USD 28 million in Ajay Piramal Group’s Piramal Realty.

Private equity deals worth USD 2.1 billion were sealed in July, taking the tally to USD 9.21 billion for January-July of 2015, according to a Grant Thornton report.

According to the tax and advisory firm, there were 110 PE deals worth USD 2.15 billion in July this year as against 55 transactions worth USD 1.85 billion in the year-ago period.

“Volumes in PE investments have shown a 100 per cent growth over the corresponding month last year with a steady 16 per cent year-on-year increase to USD 2.2 billion in deal values, marking the highest activity in 2015,” the report said.

“PE activity continues to show promising trends as overall macro level indicators look positive whereas domestic M&A activity has been slipping,” said Grant Thornton India Partner Prashant Mehra.

Sector-wise, PE players continued to prefer IT and ITeS, which saw more than 60 per cent jump in volume, while telecom, real estate and manufacturing sectors witnessed some big-ticket deals worth over USD 100 million.

The IT and ITeS sector remains in a sweet spot, contributing more than 35 per cent of total deal values, followed by telecom (23 per cent) and real estate (15 per cent).

Mehra added: “… with the GST Bill’s clearance a possibility, inflation under control, an expected increase in government spending, likely more rate cuts and better earnings prospects, M&As will perhaps swell. IPOs will probably also witness an upward movement as companies raise both primary and balance-sheet repair capital.”

Major PE deals in July include TA Associates and India Value Fund Advisors’ investment of around USD 500 million in broadband services provider Atria Convergence Technologies (ACT) and Warburg Pincus’ USD 28 million in Ajay Piramal Group’s Piramal Realty.