MoneyTree™ India report: Q4 2013

MoneyTree™ India report: Q4 2013

PE investments

  • In the last quarter of the calendar year, i.e., Q4 ’13, PE firms have invested 2.12 billion USD across 76 deals.
  • After a relatively poor third quarter, investments value was up by about 19% despite a 19% drop in the number of deals.

PE investments by industry

  • The IT and ITeS sector, as usual, has emerged as the leader in terms of value and volume of investments with an investment of 959 million USD from 37 deals in the last quarter of 2013.
  • The healthcare and life sciences sector has shown a surge in the investments with an increase of almost four times in value, from 191 million USD in the previous quarter to 729 million USD this quarter.

PE exits

  • In Q3 ’13, PE exits were worth 518 million USD from 20 deals as compared to 1.13 billion USD from 20 deals in this quarter.
  • Over 70% of the exits by value and 45% by volume have been through secondary sale (802 million USD from nine deals).

PE in IT and ITeS sector

  • The sector witnessed an increase of 41% in the value of investments with just two additional deals in this quarter as compared to the preceding quarter.
  • The average deal size in this sector has also shown a significant increase, from 19.5 million USD in the prior quarter to 26 million USD in this quarter.

Sanjeev Krishan

“Q4 proved to be an exciting quarter for PE investment with total flows exceeding 2 billion USD—the first time since post—Q4 2007. Almost 80% of the deal value was in the IT and Healthcare space. Activity levels in other sectors were largely muted. Whilst it is difficult to attribute any one specific reason for this sudden surge in deals, it just proved the point that investors, whilst closely watching the run-up to the elections, remain cautiously positive about the investment thesis for India. The hope is that the momentum witnessed in Q4 will continue to remain in early 2014. In terms of sectors, IT and ITeS and pharmaceuticals will continue to attract investments given their strong export focus, particularly against a depreciating rupee.”

Sandeep Ladda

“With the US market showing signs of recovery and with the increased attractiveness in the e-commerce space in India, there were not only an increased number of deals compared to the previous quarter, but also a substantial jump in the value. The steady increase of investments over the past few quarters in the Technology sector reinforces that this sector continues to be very attractive to the PE/VC community, and thus hints at the risk/reward relationship that it has to offer.”