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Private equity players announced investments worth $2.1 billion in Indian companies in May, the highest amount for any month in more than five years, according to global consultancy firm Ernst & Young.
The highest investment value primarily came on the back of Qatar Foundation Endowment’s $1.26 billion deal with telecom major Bharti Airtel.
“PE funds announced 30 deals totalling to $2.1 billion during May 2013, making it highest monthly total since January 2008.
“In terms of investment value, it is just marginally lower than the aggregate investments in the first four months of calendar 2013 ($2.4 billion across 140 transactions),” E&Y said in a statement.
Compared to April when it touched $1.2 billion, the aggregate investment value last month rose by 72 per cent. However, the number of deals fell by 48 per cent in May as against 51 transactions recorded in April.
E&Y noted that Qatar Foundation Endowment-Bharti Airtel deal is the second-largest private equity transaction ever in the country.
“In addition to this, there were six other PE investments with value of $50 million and above, aggregating to $712 million,” the statement said.
Even though a few big-ticket deals led to the significant increase in the total investment value, the overall PE activity continues to be sluggish across investments, exits and funds raised, it added.
Going by last month’s trend, PE funds continued to focus on retail, consumer products and real estate, among others.
“With growth concerns continuing and the consequent impact on the capital investment cycle, there has not been significant need of growth funding in recent times.
“A number of deals today are either for de-leverage purposes or to support longer working capital cycles,” E&Y Partner (Private Equity) Mayank Rastogi said.
In terms of exiting investments, there were nine non-IPO exits that were announced in May.
On the other hand, PE players have been making about 25-35 investments monthly, E&Y said.
“With large dry powder under their belt, global funds are continuing to dominate the investments and finding attractive investment opportunities,” Rastogi said.
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