Private equity and venture capital deals are up 45% so far this year from the year-ago period on the back larger ticket sizes of transactions. Till July, transactions worth $16.9 billion have been registered, according to EY’s private equity monthly Deal Tracker released on Thursday, indicating that 2018 could well be a record year for VC/PE deals in the country.
“Notwithstanding headwinds at a global as well as the domestic level, Indian PE/VC investment activity has maintained a steady run rate so far, clocking an average of $2 billion worth of PE/VC investments per month in 2018. With PE/VC investments in 2018 till date adding up to $16.9 billion, investment values are already 45% higher than last year’s comparable period. As of now, we see no reason to alter our initial projections made in the beginning of 2018, it appears we are well on track to witness another record year for PE/VC investments in India,” said Vivek Soni, partner and national leader private equity services, EY said, in a note.
On a monthly basis, July 2018 recorded PE/VC investments worth $1.5 billion, at par with investments recorded in July 2017. In terms of deal volume, investment activity increased by 50% to 63 deals in July from 42 in July last year.
Private equity investor TPG emerged as the most active fund with participation in four deals during the month, including a $105 million investment in Sai Life Sciences Ltd for a 35% stake, a $40 million investment in e-commerce platform Livespace and co-investments with a group of other investors in online ticketing platform Bookmyshow and an NBFC, Five Star Business Finance.
The month saw 11 exits worth $376 million, a slight increase of 6% over July 2017, with one $100 million plus deal each in the financial services and pharmaceuticals sectors.
Experts are hopeful that exits will keep up the momentum witnessed earlier this year. “Exit activity has been somewhat dampened by the volatility seen in the stock markets over the recent past, especially in the mid-cap and small-cap spaces. Nonetheless, there is a good amount of deal activity underpinned by the secondary and strategic sale segments and we expect the second half of 2018 to be as good as the first half for exits as well,” said Soni.
In terms of stages of investment, expansion/growth investments continued to lead in terms of value of investments, with 20 deals worth $633 million, 23% higher than July 2017; while startups ranked at the top in terms of number of deals (33 deals). July saw $431 million invested in startups, the highest monthly value in 2018. Buyouts, on the other hand, recorded the lowest monthly value of investments in 2018, with two deals worth $100 million.
