 "PE investment: More value from complete exits in 2015")
Private equity (PE) investors have seen more value coming from a complete exit from their portfolio firms during the first nine months of 2015, when compared to 2014.
According to data compiled by Venture Intelligence, a research service focused on private company financials, transactions and their valuations in India, the number of strategic sales rose from 30 in 2014 to 61 in 2015. The value of complete exits went up 371 per cent to $2.53 billion in 2015, compared to $537 million the previous year.
Partial exits also saw growth, from $20 mn in 2014 to $508 mn in 2015. Complete exit through secondary sales was $1.94 bn during 2015, as compared to $491 mn the previous year. The total number of complete and partial exits through this mode increased from 26 in 2014 to 27 in 2015. Complete exits through buybacks grew to $637 mn in 14 deals in 2015, as against $169 mn in 2014. This year, there were no partial exits in this mode; in 2014, PEs made $2.58 mn via partial exits. In public market transactions, the number of exits grew from 130 in 2014 to 132 in 2015 and complete exits raked in $1.74 bn in 2015 from $705 mn during 2014.
However, partial exits came down from $2.15 bn in 2014 to $1.21 bn in 2015.
The PEs’ exits in 2015 are an all-time high and achieved only nine months into the year. In all, 236 exits were reported with a total amount of $8.91 bn in 2015, as against 201 exits aggregating to $4.39 bn in 2014.
Experts said PE-backed Initial Public Offers (IPOs) gained momentum during the year and ended on a strong note, with Dr Lal PathLabs listing with a handsome gain over the offer price. The year saw as many as 14 PE-backed companies which helped investors sell stakes worth $973 mn versus only four issues (that enabled exits worth $173 mn) the previous year. This should augur well for the several IPOs lined up for 2016.
Arun Natarajan, founder, Venture Intelligence, said the fact that exits were at an all-time high and achieved nine months into the year can only be encouraging to PE entities and their investors.
The sharp rise in the number of exits via strategic sales year-on-year, even if some of the larger deal were through stock swaps rather than cash, should also help. Strategic sales providing exits for both PEs (iGate-Capgemini; Global Hospitals-Parkway) and venture capital investments (FreeCharge, TaxiForSure) were highlights.
According to Venture Intelligence data, the number of exits in 2015 were 236, with a total amount of $8,915 mn, as compared to 201 deals and $4,387 mn in 2014. In 2013, the number of exits was through 141 deals with a total amount of $4,834 mn, as against 155 deals in 2012 with a total amount of $4,799 mn.
