PE investments drop 50% to $3.2 bn

VC investments also down 50% to 76 deals during July-Sept quarter

Private equity investments declined 50 per cent during the September 2016 quarter to $3.2 billion across 125 deals compared to $6.5 billion across 224 transactions in the year-ago quarter. These figures, released by Venture Intelligence, include venture capital (VC) investments but exclude PE investments in real estate.

Compared to the April-June 2016 quarter, the drop was about five per cent.

Total PE investments in the first nine months of 2016 (January-September) stood at $10.6 billion from 443 transactions, compared to $13.8 billion across 594 deals in the same period in 2015.

The September 2016 quarter also witnessed 10 PE investments worth $100 million or more. The largest PE investment announced during this period was the $300 million raised by Paytm from Taiwan’s Mediatek, China’s Alibaba and VC firm SAIF Partners. The other large deals included Goldman Sachs’ $250-million investment in Essel Highways and the $175 million raised by messenger firm Hike from China’s Tencent, Taiwan’s Foxconn and US-based Tiger Global. Information technology (IT) and IT-enabled services (ITeS) companies accounted for 36 per cent of the PE investment pie in the quarter under review, attracting $1.1 billion across 65 transactions.
 

The value of IT and ITeS investments in the September 2016 quarter was down 68 per cent from the $3.6 billion across 132 deals in the same period in 2015. However, investments in banking, financial services and insurance (BFSI) have more than doubled following $100 million-plus investments in India Infoline Finance, National Stock Exchange and Hero Fincorp.

Venture capital investment flow also dropped by around 50 per cent during the September 2016 quarter with 76 investments worth $392 million being reported against 153 investments worth $657 million a year ago.

The latest data by Venture Intelligence take VC investments in the January-September 2016 period to 290 deals worth $1 billion, down 24 per cent compared to 381 deals worth $1.5 billion in the same nine-month period in 2015.

Large-sized VC investments during the September 2016 quarter were SME lender Lendingkart raising a $20-million Series B round led by new investor Bertelsmann India, followed by $17-million Series B investment in hotel aggregator Treebo Hotels (also led by Bertelsmann India with participation from existing investor SAIF and Matrix Partners) and enterprise software firm Innovaccer’s $15.6-million Series A round from WestBridge.

At 52 deals worth $240 million, IT and ITeS companies attracted 68 per cent of the VC investments (61 per cent in value terms). Health care and life sciences companies attracted seven investments worth $63 million.

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IN A DOWNWARD SPIRAL

• Total PE investments from Jan-Sept stood at $10.6 bn from 443 transactions, compared to $13.8 bn across 594 deals in 2015
   
• The Sept quarter witnessed 10 PE investments worth $100 mn or more
   
• The largest PE investment was the $300 mn raised by Paytm from Taiwan’s Mediatek, China’s Alibaba and VC firm SAIF Partners
   
• IT and ITeS companies accounted for 36% of the investments in the quarter, attracting $1.1 bn across 65 transactions
   
• The value of IT and ITeS investments in the quarter was down 68 per cent from the same quarter in 2015
   
• VC investment dropped by 50% during the quarter with 76 investments worth $392 mn against 153 investments worth $657 mn a year ago
  

 

IT and ITeS companies attracted 68 per cent of the VC investments with 52 deals worth $240 mn