Private Equity (PE) investments in India rose 55 per cent to $4.35 billion across 107 deals during fourth quarter ended December 2014-15, posting the best rise since the fourth quarter of 2007. However, compared with the sequential previous quarter, there was a 9 per cent drop in the number of deals, according to a study.

In the third quarter (July-September 2014), $2.82 billion was invested in 117 deals, according to PwC MoneyTree India report, a quarterly study of PE investment activities based on data provided by Venture Intelligence.

In comparison with the same period last year, investment value doubled but with just a 4 per cent increase in volume. In the fourth quarter of 2013, the total investment was $2.21 billion across 103 deals, the study said.

Continuing the trend of the last quarter, IT and IT-enabled services (IT & ITeS) sector retained the top slot, attracting $2.56 billion in 59 deals, which is more than half of the total investments. It represents a 55 per cent increase compared with the previous quarter and is nearly three times higher than the investment recorded in the same period last year.

“The year 2014 saw one of the highest investments in the IT and ITeS space in the last decade, driven largely by investments in the e-commerce sector. Marketplaces such as Flipkart and Snapdeal led the race, followed by niche companies such as Urban Ladder and OlaCabs,” said Sandeep Ladda, leader, Technology at PwC India.

“E-commerce is expected to continue the growth trajectory in 2015, with more investments driven by likely improvements in regulatory environment and policy,” he added.

The banking and financial sector’s (BFSI) stellar performance during the fourth quarter has made it the second best attraction. With a total investment of $563 million, it recorded a two-fold jump from the previous quarter.

The energy sector received investments valued at $481 million in just six deals, a 75 per cent increase from the previous quarter ($275 million from 11 deals) and a nine-fold increase from the same period last year ($52 million from three deals). Both the gems and jewellery and food and beverages sectors sprung a few surprises in the last quarter with their healthy performance. These sectors received investments worth $213 million (two deals) and $117 million (three deals) respectively.

PE EXITS

The exit in the fourth quarter plummeted 25 per cent to $1.02 billion in 27 deals, as compared to the previous quarter which saw $1.35 billion worth of exits in 40 deals. The declining exit activity has raised concerns for the upcoming quarters, it said.

During the same period last year, the total exit value was $1.28 billion in 31 deals.

The manufacturing sector dominated the exit space this quarter with four deals worth $410 million followed by the IT & ITeS sector with $354 million in nine deals.

rajesh.kurup@thehindu.co.in

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