The third quarter of 2015 stands as the best-ever quarter in the history of Indian Private Equity (PE) industry, according to a recent report. During the third quarter (July-September) investments worth $6.1 billion across 184 deals, was reported. The third quarter surpassed fourth quarter of 2007, which had been the best thus far with investments of $5.4 billion in 179 deals.
The first three quarters of 2015 together attracted $ 13.8 billion, which is an all-time record. These findings are part of the PwC MoneyTree™ India report, a quarterly study of private equity investment activity based on data provided by Venture Intelligence. The third quarter has seen investments doubling against the same period last year and a 36 per cent increase as compared to the previous quarter. The third quarter of 2014 investment inflow was $2.9 billion in 134 deals.
The information technology (IT) and IT-enabled services (ITeS) sector continued to be the growth drivers with bigger deals, comprising 58 per cent of the total deal value $3.6 billion from 112 deals, which is 91 per cent higher than the deal value of the previous quarter and more than double that of the year-ago period.
The energy sector, which was a distant second, attracted $549 million in seven deals, while a single deal in telecom brought the sector to the limelight with a $500-million investment. Late-stage investments have continued to perform well and attracted $2.4 billion, while the market saw buyouts worth $1.5 billion.
Bangalore beat out Mumbai by a narrow margin in terms of geography, with investments worth $1.8 billion. Mumbai, in comparison, attracted $ 1.7 billion.
Sandeep Ladda, leader - Technology, PwC India said that the technology sector has once again emerged as the leader in terms of value and volume of investments, with e-commerce leading the pack. More than $3.5 billion was raised in this quarter, which is more than double the amount in the same period of the previous year.
Several VCs raised new funds over the last few months, which led to faster deployment and boosted early-stage deals. In terms of segments, hyperlocal and mobile value-added services (VAS) companies saw significant traction.
“Given the Narendra Modi government’s objectives of enabling a start-up ecosystem in India through the ‘Digital India’ and ‘Start-up India, Stand up India’ campaigns, we expect exciting times ahead for the tech community."
Sanjeev Krishan, leader, Private Equity, PwC India said, “The government’s commitment to growth and actions on reforms is expected to keep the India story positive. The central bank’s decision to revise the interest rate downward will only provide a better platform for industries. With worldwide anxiety around China’s economy slowing and commodity prices not likely to see significant improvement in the foreseeable future, the next few quarters (years) can only lead to heightened interest from all investors in Indian assets".
