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Private equity players offloaded stakes worth over $1 billion in the first quarter this calendar year, down 18 per cent from the year-ago period.
According to a research report from PwC, in the January-March period, PE exits were valued at $1,028 million from 24 deals, registering a decline of 18 per cent in terms of value and 29 per cent in terms of volume over the same period last year.
In the first quarter of 2012 there were exits worth $1,260 million from 34 deals.
PE firms generate returns and realise investments in a company through ‘exits’ using options like an initial public offering, a trade sale, selling to another private equity firm or a company buy-back.
On a quarter-on-quarter basis, there has been a decline of over 40 per cent despite the fact that there was 14 per cent growth in the number of deals, as compared to Q4 2012, PwC said.
The majority of the exits in the first quarter came from the IT and ITeS and the BFSI sectors, contributing to around 59 per cent of the total exit value and 38 per cent of the total volume, PwC said.
The BFSI sector topped the list of PE exits with five deals worth $393 million. In terms of exit value, the IT and ITeS sector stood second aggregating $213 million from four deals in this quarter.
The healthcare and life sciences sector witnessed almost four-fold growth in exit value this quarter, from $50 million (two deals) in Q4, FY’12 to $196 million (three deals) in Q1, FY’13.
The preferred modes of exits in this quarter have been through public market sale (9 exits) and strategic sale (7 exits), constituting 67 per cent of the total exit volume.
The other modes of exits were secondary sale (5 exits), buyback (2 exits) and through IPO (1 exit).
In Q1 FY’13, the public market sale fetched the highest exit value of $815 million, which is about 79 per cent of the total exit value.
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