MoneyTree™ India Q3 2016

  • PE investments in Q3 of 2016 saw investments worth 4.3 billion USD in 131 deal
  • The growth stage led the PE investment inflow in the third quarter of the year with 2.17 billion USD in 35 deals, followed by late-stage investments with 1.48 billion USD in 21 deals
  • The BFSI sector dominated this quarter, a change from the dominance of the IT & ITeS sector in the second quarter of the year. In just 20 deals, this sector attracted 1.94 billion USD, which is 4.5 times higher than the 440 million USD in 13 deals it attracted in the previous quarter.
  • The IT & ITeS sector occupied the number two position and witnessed a reasonably good deal flow in this quarter, with 68 deals worth 1.16 billion USD compared to 92 deals worth 1.6 billion USD in the previous quarter, but much lower than the 3.72 billion USD in 135 deals seen in Q3 '15.
  • With 16 exits worth 764 million USD, the IT & ITeS sector has emerged at the top, followed by Healthcare & life sciences with 730 million USD in 10 deals. BFSI—which was at the top last quarter—saw exits worth 258 million USD in 12 deals
  • PE exits in the third quarter of 2016 were 69% higher in value than the previous quarter, with 2.25 billion USD in 63 deals; in Q2 ’16, total exits were worth 1.33 billion USD in 49 deals

"We expect some volatility in the near future as investors assess the implications of the recently concluded US Presidential elections, US Federal Bank stance on rates, and the possibility of the Trans Pacific Partnership being implemented. Having said so, private equity firms continue to express interest in India on account of government reforms and strong macroeconomic indicators. The long-term story for India remains strong with rapid reforms being introduced by the current government. There may be a pause created by the demonetisation scheme introduced by the government. Investors will be in wait-and-watch mode to digest the sectoral impact of the scheme and thereafter we expect capital inflows to be strong."

- Sanjeev Krishan
Leader, Private Equity and Transaction Services, PwC India

"This quarter saw two major developments, the US elections and the demonetisation scheme by the Indian government, which might have significant long-term impact on the Technology and eCommerce industry. In terms of activity in the IT & ITeS space, deals continue to happen, albeit at a slower pace. This year has seen the startup market undergoing a valuation correction, and several startups have begun controlling their burn rate and are focusing on strong unit economics. The FinTech space saw several marquee investments this quarter and we saw the addition of another Indian company in the list of unicorn startups, when Hike Messenger raised 175 million USD, at a valuation of 1.4 billion USD."

- Sandeep Ladda
Leader, Technology, PwC India