Improved market conditions have provided a window to major global private equity players like Warburg Pincus, Barclays Capital, TPG-Axon and Orient Global, letting them exit their investments in Indian companies through the open market route in the past few months.

A few of them have even sold stakes at rates substantially lower than the acquisition price, which, according to investment bankers, may be because of redemption pressure as funds near maturity. Such deals, feel bankers, may have been driven by concerns that valuations may soon ease with no major trigger in sight for the market, domestically or globally, in the near future.

A large number of shares have changed hands from these investors to other institutional players through bulk deal windows of the BSE and NSE in June and July. The four foreign investors mentioned above have sold holdings worth nearly Rs 800 crore through separate deals transacted in five companies-Max India, Core Projects & Technologies, Mahindra and Mahindra Financial Services, India Infoline and Indiabulls Securities.

According to Edelweiss Securities chairman and CEO Rashesh Shah, most of these PE funds could have been holding investments for the past 2-3 years, waiting for the market conditions to improve after last year's turmoil.

Now that the valuations have risen substantially in the past few months, they would take this opportunity to book gains, he added.

"There may be pressure to return money to investors abroad, that is why a few of them opted to exit investments even at a loss," Mr Shah said.

The largest deal was transacted in shares of India Infoline, in which Singapore-based PE fund Orient Global sold a 7.1% stake at Rs 124 per share for Rs 251 crore on July 29. The fund was holding 10% equity in the Mumbai-based broking house till June-end, which is expected to have fallen to 3% after last week's bulk deal. Leading FII Citigroup Global Markets picked up 4.6% from Orient Global.

Sources familiar with the deal said Orient Global has booked capital loss by selling the stake at a discount to the acquisition price. The stake was bought about one-and-a-half years ago, when the share price was ruling above Rs 200.

On July 17, Madison Holding and Melany Holdings, the FII belonging to global PE major Warburg Pincus, sold 5.4% in Max India for Rs 246 crore. The identity of the buyer was not disclosed while reporting the deals to the stock exchanges. Before the sale, Warburg held 21.6% in the insurance and healthcare company through the two FIIs and another affiliate, Parkville Holdings.

TPG-Axon, in which global PE firm Texas Pacific Group owns a stake, has completely exited its investment in Mahindra & Mahindra (M&M) Group's financial services arm M&M Financial Services. The hedge fund sold the 7.2% stake for Rs 184 crore, much lower than the acquisition cost of Rs 266 crore, on June 11.