MoneyTree™ India Q1 2014

MoneyTree™ India Q1 2014

PE investments

  • Investments in the first quarter of 2014 have started on a positive note. PE firms have invested 2.4 billion USD across 99 deals, an increase of 14% in value and 15% in volume.
  • Compared with Q1 ’13, the value of deals has doubled despite a 7% decrease in the volume. In Q1 ’13, the value of investments were 1.2 billion USD from 107 deals.

PE investments by industry

  • The IT and ITeS sector again emerged as the leader in terms of both value and volume of investments with an investment of 908 million USD going into 43 deals in the first quarter of 2014.
  • The energy sector has shown a surge in investments, with an increase of almost eight times in value, from 52 million USD in Q4 ’13 to 414 million USD in this quarter and an additional deal.

PE exits

  • The exit activity in the first quarter of 2014 has nose-dived in terms of value and volume as compared to the prior quarter. In Q4 ’13, PE exits were worth 1.5 billion USD from 24 deals as compared to 277 million USD from 15 deals in this quarter.
  • The majority of the exits in this quarter came from the IT and ITeS and the agri-business sectors which together contributed over 55% of the total exit value and 40% of the total volume.

PE in IT and ITeS sector

  • The IT and ITeS sector, yet again, has emerged as the leader in terms of value and volume of investments with an investment of 908 million USD from 43 deals in the first quarter of 2014.
  • The average deal size in this sector has shown a drop in this quarter, from 23.8 million USD in the prior quarter.

Sanjeev Krishan

“The January to March 2014 quarter was a positive one with general buoyancy in the investment outlook. With the formation of a new government around the corner, future flows (for the rest of this year and the next few years) will hinge upon the stability of the new government and its stand on various policies and regulatory matters. The general perception is that the new government will undoubtedly adopt a friendly investment regime to provide a fillip to the overall economic growth of the country.”

Sandeep Ladda

“We have seen yet another quarter of PE investments dominated by the IT and ITeS sector. It has been an interesting quarter, where most of the leading e-commerce companies have received investments for expansion. The infusion of funds in the online services subsector will continue for the next couple of years for the following reasons: (i) Most companies are in the growth stage and are scaling up (ii) Newer product lines such as baby products, food, niche apparel segments and pet products are now available online and (iii) Global companies in the same line of business are investing in Indian companies, triggering speculation of potential acquisition in the medium to long term. With growing competition in the online space, inorganic growth is a possible way forward for global e-commerce players who are keen to establish their footprint in India.”