PE-VC exits in India more than double to hit record $33b in 2018: Bain Report

Photo: Pixabay

Private equity (PE) and venture capital (VC) exit deals more than doubled in 2018 from last year to a record high of nearly $33 billion, propelled by the Walmart-Flipkart deal, according to consulting firm Bain & Co.

A total of 265 exit deals were recorded last year though the top ten exits made up as much as 70% of total exit value, Bain & Co. said in its India Private Equity Report 2019. There were 211 exit deals in 2017 totalling $15.7 billion.

The other major deals included Blackstone’s exit from Intelenet Global Services, Apax Partners’ exit from GlobalLogic, sale of Star Health and Allied Insurance and TPG’s exit from Vishal Retail.

Exits increased in most sectors last year with consumer tech, information technology (IT) and IT-enabled services, and banking, financial services and insurance (BFSI) being the primary contributors to exit values, according to Bain & Co.

Sectors such as consumer technology, IT/enterprise tech and BFSI delivered the highest return on investments for PE funds in the last five years, the report said. The consumer technology sector delivered an average return of 5.7 times the capital invested, while the numbers for the IT/enterprise and BFSI sector were 4.6 times and 3.7 times respectively.

“Given how India’s economy is poised for growth in the coming year, and with capital markets on an upswing, many more exits are expected during the next few months,” said Bain & Co. referring to expectations for 2019.

However, rising valuations and interest rates continue to cause concern for most of the investors.

On the investment front, PE investors deployed $26.3 billion across 793 deals in 2018. The deal volume was higher than in 2017, but the average deal size was flat. The result was a small decline in total investment value, which still was the second-highest in the last decade.

“Funds expect further investment activity in BFSI and consumer/retail, though the valuations are still perceived to be high. Healthcare is another sector of rising interest, with funds looking at players across the spectrum. Interest in technology and IT will be largely driven by rapidly growing enterprise tech (SaaS) companies that operate out of India and sell globally,” the report said.

According to Bain & Co., India-focused dry powder (capital available with PE funds) remains healthy at $11.1 billion, indicating that high-quality deals are not lacking capital.

New asset classes like alternative investment funds (AIFs) and distressed-asset management have further grown in the Indian market, aided by government regulations and tax breaks.

This article was first published on livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.