Comments
The private equity (PE) and venture capital (VC) investments totalled $27 billion during this year till November (January-November), surpassing the year-end high of $26.1 billion recorded in 2017. Till the end of November, PE/VC exits recorded $24.6 billion in value, according to EY’s Private Equity Monthly Deal Tracker.
“Though November 2018 has been a relatively weaker month for PE/VC investments and exits, the momentum of PE/VC activity in India continues to be strong. As we had forecasted at the start of the year, 2018 has emerged as the best year for PE/VC investments, with $27 billion in PE/VC investments till date, and we still have one more month to go,” Vivek Soni, Partner and National Leader-Private Equity Services, at EY said.
“The exit activity also continues to be supported by strong secondary and strategic deal activity while open market and IPO markets are relatively soft,” he added.
In November 2018, PE/VC investments recorded $1.6 billion, 33 per cent lower compared with November 2017 and 49 per cent lower compared with the previous month. The decline was mainly on account of fewer large deals (deals of value greater than $100 million) with November 2018 recording only five large deals aggregating $950 million, compared with nine large deals worth $1.8 billion in November 2017 and six large deals worth $2.5 billion in October 2018.
The largest deal during the month saw Temasek buyout SP Infocity IT Park from CPPIB and Shapoorji Pallonji for $353 million. The other large deals include GIC and TFL Pension Fund’s $159 million investment in Kotak Mahindra Bank and India Resurgent Fund’s $156 million investment in Archean Chemical Industries.
From the point of view of type of investments, credit investments ($455 million) and buyouts ($399 million) were highest in terms of value. Growth ($265 million) and start-up ($286 million) investments recorded over 60 per cent decline in value compared with November 2017. Till the end of November 2018, buyouts have recorded $7.4 billion in investments across 37 deals, which is more than the value of buyouts in the previous two years combined ($3 billion in 2017 and $3.9 billion in 2016). Start-up investments have also recorded a strong rebound in 2018, with $4.1 billion investments made till the end of November, 17 per cent higher than the value recorded in entire 2017.
From a sector point of view, real estate ($723 million across five deals) was the top sector followed by financial services ($249 million across nine deals).
Exits
Exits in November at $394 million, recorded significant decline compared with $2.7 billion recorded in November 2017 and $1.4 billion recorded in October 2018, mainly on account of fewer large exits. The largest exit in November 2018 saw CPPIB exit its 80 per cent stake in SP Infocity IT Park for $283 million compared to large $1 billion plus exits recorded in November 2017 and October 2018. There were no PE-backed IPOs in November 2018.
From a sector perspective, real estate recorded the highest value of exits on account of the $283 million SP Infocity exit by CPPIB.
Fund raising
While $1 billion worth fund raise plans were announced in November 2018, the month witnessed $398 million in fund raises, compared with $675 million in November 2017.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.