MoneyTree™ India Q2 2016

  • The Q2 ’16 has seen investments worth 4.3 billion USD in 147 deals. The average deal size for this quarter was 29.1 million USD. 
  • As compared to Q1 of CY 16 when the investments were 4.2 billion USD in 186 deals there has been a 2% increase in value terms despite deal volume decreasing by 21%. 
  • Despite a weak show by e-commerce investments, the IT & ITeS sector continued its dominance. While the investment flow of 1.6 billion USD in 92 deals was 17% higher than Q1 of the year in value terms, there was an 11% drop in terms of volume. 
  • The banking, financial services & insurance sector (BFSI) again secured the second position, attracting 769 million USD, a 25% decline as compared to the previous quarter and a 14% surge as compared with the year-ago period. 
  • PE exits in the second quarter of 2016 were among the lowest in recent history, with 1.2 billion USD in 40 deals. This is a 54% drop as compared to the previous quarter (2.6 billion USD in 39 deals) and a 70% drop from Q2 ’15 (4.0 billion USD in 71 deals). 
  • With five exit deals worth 465 million USD, the BFSI sector has emerged at the top, followed by telecom with 206 million in one deal. IT sector saw exits worth 173 million USD in 14 deals.

"The outlook remains positive as India remains firm on its growth agenda. The IT sector continued its dominance with investments of 1.6 billion USD, primarily led by the 1.1 billion USD buyout of Mphasis by Blackstone. Financial services continues to be a favoured sector among growth/late-stage growth investors. Non-banking financial companies, microfinance and fintech continue to witness significant interest. Logistics and consumer could contribute to investment growth in the second half of the year with GST having the potential to spur logistics deals."

  - Sanjeev Krishan
    Leader, Private Equity, PwC India

"Mergers and acquisitions (M&As) in the technology sector have boomed over last few months—from mega mergers to small-scale transactions. The e-commerce industry is poised for consolidation and is likely to witness a series of M&As this year. Recurring trends of transformation, consolidation and investments in emerging technologies continue to demonstrate the rapid evolution within the technology industry, which is also seeing increasing interest in digital assets from non-digital buyers. Going forward, we expect a gradual increase in deal activity as the year progresses."

- Sandeep Ladda
Leader, Technology, PwC India