MoneyTree™ India Q2 2017

PE investments

PE investments

  • The second quarter of the year recorded investments worth 6.3 billion USD in 155 deals, a 13% decrease in value terms and a 3% decrease in deal volume compared to Q1 2017, which saw investments worth 7.3 billion USD in 159 deals.
  • The value of deals in this quarter has grown by 51% as compared to Q2 2016 where investments stood at 4.2 billion USD in 173 deals.

PE investments by industry

PE investments by Industry

  • The Information technology & IT-enabled services (IT & ITeS) sector retained the top spot this quarter, with 78 deals worth approximately 2.7 billion USD.
  • The Manufacturing (258%) and Energy (152%) sectors both displayed notable growth in PE investments compared to Q1 ’17, closing with around 121 million USD in five deals and 541 million USD in six deals, respectively.

PE exits

PE exits

  • PE exits in Q2 ’17 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 & ITeS was the top sector in terms of PE exits in this quarter, with a total of 14 exits worth around 718 million USD. BFSI and Healthcare & 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 showed an upward trend in Q2 2017, enjoying a 237% and 775% increase in exit value in comparison to the previous quarter and year-ago period, respectively.

Despite the slowdown in growth in the Indian technology sector and in the midst of layoffs and US visa issues, technology continued to be a major investment theme in the second quarter, with IT & ITeS accounting for a large share of overall deal value despite growth in volumes remaining flat. This quarter witnessed significant developments around further consolidation in the e-tail segment, along with several new billion-dollar funds flowing into the technology sector. 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. As e-Commerce players strive to achieve profitability, the year could also see companies opting for an initial public offering (IPO) as a preferred exit route.

Sandeep Ladda
Leader, Technology
PwC India

As per the fourth edition of the FICCI-PwC Strategy& India Manufacturing Barometer report, the Indian manufacturing industry is looking to focus on new products/services, R&D, IT and expanding its facilities in select sectors. Companies in the manufacturing space have shown resilience in the face of challenges and are confident about the sector’s growth prospects. While the number of PE deals in the manufacturing sector is limited compared to that in other sectors, we note that quite a few manufacturing companies are open to exploring the PE route to further expand their business operations.

Bimal Tanna
Partner and Leader, Industrial Products
PwC India

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Sanjeev Krishan
Private Equity and Deals Leader, PwC India
Tel: +91 124 330 6017
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Sandeep Ladda
Leader
Tel: +91 22 66891444
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