PE deals up 21% in 2018

Private equity investments have grown a strong 21% so far this year because of increased big-ticket funding rounds, according to a report by Grant Thornton, an assurance, tax and advisory firm.

The report said the year saw 14 investments of $100 million and above, which accounted for 64% of investment values in 2018.

The real estate, start-up, banking, energy, and pharma sectors led with 77% of total deal values while the start-up sector dominated volumes with a 58% share.

“PE/VCs continued to invest in start-ups, banking and financial services, real estate, pharma and healthcare and energy and natural resources. Though the opportunities in aforesaid sectors will remain of interest, we expect the PE/VCs to follow a cautious approach given the number of portfolio exits that are outstanding and the upcoming national elections and its impact on the policies,” said Pankaj Chopda, director at Grant Thornton India LLP, in a statement.

India has seen 15 IPOs that raised $3 billion so far this year, a 4.8 times increase over the year-ago period. On the other hand, QIPs (qualified institutional placements) saw 20 issues raising $1.8 billion compared to six issues which raised $1.3 billion in the same period last year.

Some of the top deals in April include SoftBank and Alibaba’s investment of $445 million in Paytm E-Commerce, which runs Paytm Mall; Lone Star Funds and RattanIndia Group’s investment of $400 million in RattanIndia Finance; and Brookfield Asset Management Inc’s $360 million investment in Essar Group–Equinox Business Park.

India continues to see strong growth in deals activity with the year so far recording 442 mergers and acquisitions (M&As), and private equity (PE) deals worth $44 billion (Rs 2.7 lakh crore), a 26% increase in deal value from the previous year. M&As recorded a 27% increase year-on-year in deal value, primarily due to a revival in domestic and cross-border deal activity.

Relative easing of regulations and consolidation across sectors significantly drove up deals activity in April 2018. The month recorded 119 M&A and PE deals worth $21 billion. The month of April saw 40 M&As worth $19.1 billion, the highest monthly values recorded after $23.8 billion in March last year.