MoneyTree™ India Q4 2017

PE Investments in India as per MoneyTree India report

PE investments

  • Private equity (PE) investments in the final quarter of 2017 hit a year low with investments worth at 5.7 billion USD in 153 deals.
  • As compared to Q3 ’17 (where investments stood at 6.6 billion USD in 142 deals), the value of deals this quarter fell by 14% and the volume increased by 8%.

Private Equity investments by industry as per MoneyTree India report

PE investments by Industry

  • The BFSI sector emerged as the winner in the last quarter of 2017 with 16 deals worth approximately 1.8 billion USD.
  • The IT & ITeS sector experienced a slowdown in deal activity and dropped to the second position in Q4 ’17, attracting 1.2 billion USD in 94 deals. This marked a 67% decline in value as compared to the previous quarter even though volume grew by 11%.

PE exits as per MoneyTree India report

PE exits

  • PE exits in Q4 ’17 saw a 46% increase in the value of PE exits compared to the last quarter. In all, there were 68 deals worth around 4.2 billion USD in comparison to 55 deals worth around 2.9 billion USD in the previous quarter.
  • In Q4 ’17, With 18 exit deals worth 2.9 billion USD, the IT & ITeS sector continued to occupy the top spot, followed by Energy with 252 million USD in two deals. BFSI, which was second in Q3 ’17, slipped to the third position with 238 million USD in nine deals, registering a 62% fall in deal value. 

In 2017, India witnessed the highest investment in almost a decade from private equity in real estate (PERE). The differentiating factor this year has been the dominance of the commercial office and warehousing segment as compared to residential, which had been attracting the lion’s share of investments till last year. GIC’s investment in DLF Assets and CPPIB’s joint venture with Indostar for its warehousing platform were the marquee deals that defined the PERE landscape last year. Next year, the key segments to look out for would be office, warehousing and affordable housing, as far as PERE is concerned. As the demand for good quality commercial office space continues to grow, institutional capital would continue to build its portfolio of leased assets. GST is already bringing changes in logistics/supply chains through the consolidation of warehousing/logistics facilities, thereby creating enough scale to attract PE investments. The policy boost towards affordable housing is likely to bring significant PE interest as institutions like IFC and HDFC have a dedicated large corpus for this segment. With the current supply overhang in the mid- to high-income residential segment slowly paring down in the coming years, PE shall be sought for these projects, given that RERA has disincentivised funding through customer advances.

Manish Agarwal Partner and Leader Infrastructure

Manish Agarwal
Capital Projects and Infrastructure Sector Leader,
PwC India

BFSI continues to attract a lot of interest against the backdrop of some definitive structural measures such as demonetisation, the introduction of the Insolvency and Bankruptcy Code, recapitalisation of banks, increase in FDI limits in insurance and the steady flow of recurring subscriptions in the domestic asset and wealth management business. BFSI players, along with fintech disruptors, are set to broaden the distribution of financial products and expand market share.

Sreedhar Vegesna Partner and FS Advisory Leader,  PwC India

Sreedhar Vegesna
Partner and FS Advisory Leader, 
PwC India 

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