MoneyTree™ India Q4 2016

PE investments

PE investments

  • Investments touched an annual high of 5.0 billion USD in 169 deals, a 47% increase in value terms and a 17% increase in deal volume compared to Q3 2016, which saw investments worth 3.4 billion USD in 144 deals.
  • The value of deals in this quarter has grown by 27% as compared to Q4 2015 where investments stood at 4.0 billion USD in 199 deals.

PE investments by industry

PE investments by Industry

  • The telecom sector emerged as a surprise winner in the last quarter of 2016, racing past the front runner for the last two quarters—the IT & ITeS sector—which slipped to the third position.
  • The BFSI sector remained at the second position in Q4 2016, attracting 846 million USD in 16 deals, though investments dipped 7% and 13% as compared to the previous quarter and year-ago period, respectively.

PE exits

PE exits

  • PE exits in the Q4 2016 were 34% lower in value than the previous quarter. In all, there were 53 deals worth 1.6 billion USD. In Q3 2016, the total exits were worth around 2.5 billion USD in 71 deals.
  • With 10 exit deals worth 720 million USD, the manufacturing sector emerged at the top, followed by healthcare & life sciences with 333 million USD in seven deals.

IT & ITeS companies, backed by a number of e-commerce and internet-based start-ups, have dominated PE investments over the last several quarters, accounting for a large share of deal volumes and deal values in 2016. This quarter, however, saw a decline in the total investment in the IT & ITeS space on account of issues with the valuation of e-Commerce companies and declining margins in IT & ITeS. It is expected that 2017 may experience a boost in investment activity in India. Further, sovereign wealth funds as well as pension funds are increasingly investing in companies directly instead of investing in PE firms, which might boost the growth prospects of the industry.

Sandeep Ladda
Leader, Technology
PwC India

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Sandeep Ladda
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