MoneyTree™ India Q4 2014

MoneyTree™ India Q4 2014

PE investments

  • The fourth quarter saw investments worth 4.35 billion USD across 107 deals. The investment value doubled, in comparison with the same period last year, with just a 4% increase in volume.
  • Despite a 9% drop in the number of deals compared to the previous quarter, the deal value rose by 55%. In Q3 ’14, 2.82 billion USD was invested in 117 deals.

PE investments by industry

  • The IT and ITeS sector attracted 2.56 billion USD in 59 deals, a 55% increase as compared to the previous quarter and almost three times higher than the investments in the same period last year.
  • BFSI emerged second in terms of investment value with investments worth 563 million USD in 11 deals, a two-fold increase compared to the previous quarter.

PE exits

  • The exit activity in Q4 ’14 plummeted 25% to 1.02 billion USD in 27 deals, as compared to the previous quarter which received 1.35 billion USD worth of exits in 40 deals.
  • The manufacturing sector dominated the exit space this quarter with four deals worth 410 million USD followed by the IT & ITeS sector (354 mllion USD in nine deals).

PE in IT and ITeS sector

  • The IT & ITeS sector received over 59% of the total private equity invested in India, an increase of 55% as compared to the previous quarter (2.56 billion in 59 deals).
  • The average deal size in this sector surged from 25.4 million USD in the previous quarter to 43.3 million USD this quarter.
 

“eCommerce contributed significantly to the surge in the private equity investments during CY2014 and in the last quarter as well. This is expected to continue as eCommerce businesses attempt to keep themselves well capitalised; sectorally, we expect consumer-centric/IT/life sciences businesses to continue to see the exit greater investments in 2015. We also expect a large number of the residual 2006-08 investments to come up for exits this year. At the same time, investors continue to look for real reforms and on the ground movement. This could be key to the sustenance of the momentum being witnessed at the moment.”

- Sanjeev Krishan
Leader, Private Equity, PwC India

 

“The year 2014 saw one of the highest investments in the IT/ITeS space in the last decade, driven largely by investments in the eCommerce sector. Marketplaces like Flipkart and Snapdeal led the race, followed by niche companies such as Urban Ladder and OlaCabs. eCommerce is expected to continue the growth trajectory in 2015, with more investments driven by likely improvements in regulatory environment and policy. From an IT/ITeS perspective, as digital evolves, the hybrid cloud become popular, and big data become more mainstream, the industry will face a talent crunch. Furthermore, it is expected by the IT/ITeS and eCommerce companies that the Budget 2015 will address some key industry tax and regulatory issues and create a platform to attract more investments.”

- Sandeep Ladda
Leader, Technology, PwC India