Mumbai, August 22, 2017: PE funds remained buoyant in the second quarter of CY 2017, with investments worth 6.3 billion USD across 155 deals. There was a 51% increase in deal value as compared to the same period last year, with the average deal size for Q2 ’17 amounting to around 40.9 million USD. These findings are part of the PwC MoneyTree™ India report, a quarterly study of private equity investment activity based on data provided by Venture Intelligence.
As per the report, the PE appetite continued to be strong with late-stage investments accounting for almost 57% of the investment value at 3.6 billion USD this quarter, followed by buy-out deals at 0.9 billion USD. With valuations at an all-time high, PIPE (Private Investment in Public Equity) deals witnessed a 76% decline in terms of value over the previous quarter.
Sanjeev Krishan, Leader, Private Equity, PwC India said, “Investor confidence in India’s growth story continues to be strong with both foreign as well as domestic players tapping into opportunities here. However, the Goods and Services Tax (GST) may impact the investment landscape in the near term, as investors assess the scenario and proceed more carefully.”
Regionally, Mumbai gained an edge over NCR (National Capital Region) in Q2 ’17, with total investments worth around 2.3 billion USD in 39 deals. With a 70% drop in PE investment value as compared to the last quarter, Bengaluru slid down to the third spot.
PE funds also demonstrated renewed confidence in the Technology sector with investments worth 2.7 billion USD, a 93% increase over the same period last year, having recorded the largest deal - Softbank’s investment of 1.4 billion USD in One97 Communications.
According to Sandeep Ladda, Global TMT Tax Leader and India Technology Sector Leader, PwC India, “Despite the slowdown in growth in the Indian Technology sector and in the midst of layoffs and US visa issues, Technology continued to be an important investment theme in the second quarter with IT & ITeS accounting for a large share of overall deal value. As transactions continue to move online, new areas such as FinTech and the hyperlocal and travel segments are set to benefit in the long term.”
Private equity exits
From an exit standpoint, this quarter saw a 13% decrease in the value of PE exits compared to the last quarter. In all, there were 61 deals worth around 2.8 billion USD in comparison to 58 deals worth around 3.2 billion USD in the previous quarter.
IT and ITeS was the top sector in terms of PE exits in this quarter as well, with a total of 14 exits worth around 718 million USD. BFSI and Healthcare and Life sciences took up the second and third positions, with exits worth around 631 million USD in 12 deals and 556 million USD in 11 deals, respectively. The Manufacturing sector was a surprise, showing an upward trend in this quarter, enjoying a 237% and 775% increase in exit value in comparison to the previous quarter and year-ago period, respectively.
Note to editors
Information included in this release or related venture capital investment data should be cited in the following way: "PwC's MoneyTree™ India Report with data provided by Venture Intelligence." After the first reference, subsequent references may refer to PwC's MoneyTree India Report. Charts and tables displaying the data are sourced to "PricewaterhouseCoopers India Pvt. Ltd/Venture Intelligence data." After the first reference, subsequent references may refer to PwC MoneyTree India Report. For access to the report, please visit https://www.pwc.in/publications/moneytree.html
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