Private Equity (PE) invested $2.12 billion (about Rs 13,144 crore) in India in value terms during the last quarter of the calendar year, a 74 per cent rise compared with the same period a year ago.

 

This has been in contrast to the trend since 2007, when PE investments in the fourth quarter were below $2 billion despite a higher volume of deals. The increase is despite a 30 per cent fall in the volume of deals, according to a report by PwC.

 

During the quarter under review, the value of investments stood at $1.22 billion from 109 deals, the findings, which is a part of PwC MoneyTree India report, a quarterly study on PE investment activities.

 

The PE firms invested through 76 deals during the quarter, while PE exits doubled with an exit value of $1.13 billion from 20 deals. After a relatively poor third-quarter, investments value was up by about 19 per cent, despite a 19 per cent drop in the number of deals – $1.78 billion from 94 deals.

 

The investments rose by 19 per cent on a quarter-on-quarter basis, it said.

 

With 37 deals worth $959 million in the fourth quarter, the IT and ITeS sector is yet again the leader in terms of value and volume.

 

“Almost 80 per cent of the deal value was in the IT and healthcare space. Activity levels in other sectors were largely muted. Whilst it is difficult to attribute any one specific reason for this sudden surge in deals, it just proved the point that investors, whilst closely watching the run-up to the elections, remain cautiously positive about the investment thesis for India,” Sanjeev Krishan, leader, Private Equity, at PwC said.

 

“The hope is that the momentum witnessed in Q4 will continue to remain in early 2014. In terms of sectors, IT and ITeS and pharmaceuticals will continue to attract investments given their strong export focus, particularly against a depreciating rupee,” he added.

 

rajesh.kurup@thehindu.co.in

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