2017 Begins with 22% Decline in PE investments: Report

Delhi-NCR & Mumbai together attracted a bigger share of PE deals than Bengaluru, Hyderabad, Chennai, Pune, Kolkata, Jaipur and Ahmedabad put together

News Corp VCCEdge, Indian publisher of alternative investment, deals and startup news, data and information and part of globally diversified media, education and information services group, News Corp, has today released its India Quarterly Deals report for Q1 CY2017.

Capturing funding deal activities encompassing private equity, venture capital, angel/seed investment transactions for the seventeen quarters ending March 2017, the report also offers information on mergers and acquisitions with sector and region-wise analysis.

Highlights of the News Corp VCCEdge India Quarterly Deals report

PE Investments see a sober start to the year

• 238 deals worth $3.04 bn in Q1, CY2017 vis-à-vis 432 deals worth $4.19 bn in Q1, CY2016
• Median deal value quadrupled to $2.25 mn for Q1, 2017 compared to $0.6 mn in Q1, 2016
• Angel investments at a 4-year low at $28 mn with VC investments dropping by 14% Y-o-Y
• The top PE deal for the quarter was the Bharti Infratel – KKR, CPPIB deal which at $946 mn pushed up the average deal value

Fund infusion sees better times though investors tread cautiously

• Investment values doubled against last quarter to $820 mn for Q1 CY2017, though this was a fraction of the $2,500 mn for Q1 CY2016
• There were no fresh investments of $250 mn or more from investors, this quarter
• The top 4 fund infusions involving Oman India Joint Investment Fund II, KKR India Credit Fund, ICICI Venture Fund Management’s India Advantage Fund Series IV and IDFC Private Equity Fund IV captured a major share of total funds at $641 mn

Ominous times for PE funds as exit values fall

• Y-o-Y, the situation seems grim with exits having fallen to $1.4 bn for Q1 CY2017 vis-à-vis $2.1 bn for the same quarter last year
• Open markets dominated exit deal values at $945 mn, bouncing back as the preferred exit route
• Key exits recorded for the quarter were the Providence Equity Partners-Idea Cellular deal and the Khazanah Nasional Berhad-Apollo Hospitals deal

Delhi NCR continues to rule the roost

• At $1,246 mn, Delhi saw more action this quarter than Mumbai ($692 mn) and Bangalore ($441 mn) put together
• Information Technology continued to dominate the space in Delhi NCR with 29 deals in the sector followed by 9 deals in Consumer Discretionary and 4 each in Consumer Staples and Industrials
• Coming second in terms of deal value was Mumbai with 47 deals amounting to $692 mn, with Information Technology leading the way with 23 deals followed by Consumer Discretionary with 7 deals and Financials at 6 deals
• Bengaluru registered 53 deals amounting to $441 mn with close to 60% being in the Information Technology space and ~19% in the Consumer Discretionary space. Pune with 8 deals to the tune of $62 mn and Hyderabad with 18 deals amounting to $32 mn made it to the top-5 investment destinations of India

Vodafone-Idea deal dominates M&A space

• M&A deal numbers came in at 226 as opposed to 237 for the last quarter, with the trend of a few large deals contributing to the total value continuing
• Of the total of $16 bn deal value for Q1 CY2017, the Vodafone-Idea deal saw a majority deal value of $12.4 bn
• Low median value across deals in the past 5 quarters vis-à-vis higher average deal values indicate a larger number of small ticket transactions in the space
• The Electronic Components space saw 3 deals followed by Wireless Telecommunications and Pharmaceuticals at 2 each

Sharing her views on the News Corp VCCEdge India Quarterly Deals report, Nita Kapoor, Head India – New Ventures, News Corp and CEO, News Corp VCCircle said, “PE sentiment seems to be extremely cautious and this is clearly reflecting in market performance. Appetite for risk is low with consolidation, job cuts and rollback of funding plans underway. A dip of 22% in deal values with simultaneous decline in exit figures is worrisome, though these are early days and a bounce back is possible, if not probable in the immediate future.”

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