Private equity investments in Jul-Sep qtr rise despite sluggish deal sentiments: Report

Notwithstanding global and domestic economic uncertainties, private equity funds recorded an all time-high investment of USD 9.4 billion in the third quarter this year, driven by big-ticket transactions, a report said on Thursday.

According to Grant Thornton's quarterly PE Dealtracker, the July-September quarter saw 211 PE deals worth USD 9,613 million, while in the corresponding period last year there were 216 such transactions worth USD 5,202 million.

"It is interesting to note that amid uncertainties, PE investments recorded all time high investment value of USD 9.4 billion in the third quarter surpassing the previous record of USD 7.9 billion in Q1 2019," said Pankaj Chopda, Director, Grant Thornton India LLP.

Chopda further noted that "large investments added real momentum to the Indian private equity investment activity with 21 high-value investments of USD 100 million and above each, contributing to 79 per cent of the total PE investment values".

As per the report, for January-September period, PE investment values soared 1.6 times despite a 4 per cent fall in deal volumes.

For the first nine months of this year, there were 595 PE deals worth USD 24,302 million, while the same period last year witnessed 622 such transactions worth USD 14,961 million.

"With the increasing confidence amongst investors, the reduction in corporate tax rate is also expected to give a boost to companies in India and those that want to invest in India making it more attractive for both overseas and domestic investors," Chopda said.

PE deal volumes across startup, e-commerce, IT & ITeS, BSFI and pharma sectors represented 86 per cent of the deals by volume, the report said.

The July-September quarter witnessed the single-biggest private equity deal ever in India with Brookfield's USD 3.7 billion investment in Reliance Industries Ltd's telecom tower assets.

With this, the telecom sector topped the value chart for the quarter followed by high value deals in the infra, banking and real estate sectors, together capturing 60 per cent of the total deal values, the report said.

The government has been working on a road map to not just clean the banking system but also make it robust. Rising investment in technology and infrastructure will realise efficiency gains. Additionally, adoption of technology and continuous innovations across sectors is likely to boost deal activity, the report said.

Meanwhile, the education sector has also been very encouraging with Byju's USD 150 million funding. This marks the second big-ticket bet by Qatar Investment Authority this year in an Indian company along with Owl Ventures' first investment in an Indian ed-tech company, the report said.