New PE continues to trickle into 2011 in India. Since Jan almost $3 bln of PE funds have come with a lot of new promoter institutions going for PE funds . However a look at bank credit commentary shows infrastructure and construction lending tapering off and also making it unlikely that 15-30 year funding for infrastructure will be lent an easy hand at the equity markets. On the other hand, the $26 bln outgo in Emerging Market Equities in Q1 2011 has been replaced by $10 bln i n inflows in just the last 3 weeks oin ETFs and almost $3 bln in India portfolio flows invested thence

While a lot of new funds are looking to cement deals for their parked funds in infrastructure and retail lifestyle expansion plays India gets particular attention in both inward investment and outgoing M&A in Pharma and Healthcare. Both markets in drugs and in health insurance are underserved inside the country and the talent and local promoters' cash makes it easy for outward expansion in Korea, Africa or othernook s and crannies which allow that particular deal size and business benefit that Indian promoted diaspora can bring. Banks are unlikely to suffer NIM reactions from increasing deposits but Corporate lending and fee based lines are likely to get added emphasis here as well. Sectorally, Heatlthcare and Big Pharma flows (Vaccination, Generics, thru Joint marketing with Sun, Biocon) have to use this small window in the initial phases of the next bull run to announce and cultivate larger deals. Whether PE and SWF cash will be able to do the required due diligence is however suspect as this sector is nefariously overpriced in corporate advisory deals etc.