In August, Quartz reported that “It’s raining private equity investments in India.” By the end of the quarter, that rain seems to have turned into a monsoon.
The EY Q3 Roundup notes that: “PE/VC investments in India in third quarter (3Q2017) witnessed a sharp increase on the back of some large deals with size in excess of US$ 200 million each. 3Q2017 recorded the highest investments in a quarter in the history of the Indian PE/VC industry ever, bettering the high recorded in the previous quarter.”
- “On a quarterly basis, investments increased 180% in value (US$ 8.7 billion vs US$ 3.1 billion in 3Q2016) and 17% in volume terms (141 deals v/s 121 deals in 3Q2016).”
- “Early stage / VC deals continued to dominate the deal volumes accounting for 51% (72 deals) of all deals in 3Q2017, similar to last year.”
- “Q2017 recorded 19 deals of value greater than US$100 million, aggregating US$7.0 billion and accounting for 80% of the investments during the period. 2017 has witnessed and increasing proportion of large sized deals, further validating the growing confidence of investors and maturing of the Indian PE market.”
In terms of sectors, the greatest investment strength came in Ecommerce, Real Estate, and Financial Services.
And the activity bump comes not just on the investment side. Bloomberg reports that “Private equity and venture capital investors sold $4.7 billion of shares in the September quarter, higher than in any three-month period since 2009, through IPOs and second sales.”
EY notes: “Exits grew 128% by value in 3Q2017 (US$ 4.7 billion Vs US$ 2.0 billion in 3Q2016) while number of deals remained at similar levels, recording the best quarterly performance for exits since 2009, driven by increase in exits via capital markets (both primary and secondary) as well as secondary divestments (sale to other PE funds). Exits via IPO recorded US$1 billion in value terms, highest value for exits via IPOs in a quarter, mainly driven by the largest IPO exit ever by a PE fund in India, which saw Fairfax selling its 12% stake in ICICI Lombard for US$558 million in September 2017.”
In the Quartz piece (again written before the Q3 numbers were published), Mayank Rastogi, partner at EY, who focuses on PE said: “India is clearly maturing as a PE market with bigger and more complex deals becoming more commonplace. Greater numbers of-big-size deals and buyouts are both a testament to this and it is clearly visible in the first half 2017 investment numbers.”
Will things slow down? EY reports that in terms of fund raising: “3Q 2017 recorded US$2.2 billion in fund raise, highest quarterly fund raise since 2010, the largest being US$750 million raised by Kedaara Capital. There were US$1 billion new fund raise plans announced in 3Q2017.”