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Private equity (PE) and venture capital (VC) investments in India touched a new high of $21.8 billion in 2017 till date (January-October), surpassing the previous record of $19.6 billion in 2015.
The rise has been primarily driven by a significant number of large deals of a value $500 million and above and many involving big bets by global pension funds, according to an EY study.
Till date, 2017 has recorded seven such deals totaling $8.6 billion, of which four deals were greater than $1 billion. This is in contrast to 2016, which recorded two deals worth $2.5 billion and 2015, which recorded four deals worth $2.2 billion.
“Continuing the trend of the record July-Aug-Sept quarter, which saw over $8.7 billion of PE/VC deal announcements, October 2017 has not disappointed,” Vivek Soni, Partner and Leader for PE Advisory at EY said.
“The year-to-date PE/VC investments have eclipsed the highs seen in 2015, already making 2017 a record year for both investments and exits. With two months to go for the year-end, we expect to close the year with PE/VC investments 25 per cent to 30 per cent higher than the 2015 record levels,” he added.
Investments
October 2017 recorded a 77 per cent rise in the value of investments, while in terms of volume it fell by 6.6 per cent compared with the same period last year ($2.1 billion across 56 deals in October 2017 vs $1.2 billion across 60 deals in October 2016). On a month-on-month basis, there was an increase of 16.7 per cent in value terms and 19.1 per cent in volume terms.
Two large deals accounted for 71 per cent of the total deal value. The largest deal saw Tencent and Softbank invest $1.1 billion in Ola cabs, followed by CDPQ investing $400 million in Logos India Ventures. Till date, 2017 has recorded four investments of value greater than $1 billion compared to just one last year.
Exits
Exits fell 18.7 per cent in value terms in October 2017, while in volume terms it remained at similar levels. On a month-on-month basis, exits fell 69 per cent in value terms and 29 per cent in volume terms. The real estate sector witnessed the highest value of exits during the month with $158 million recorded across three exits.
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