India 2018: PE-VC investments touch $27b in Jan-Nov, surpass previous record

Pedestrians as seen in an alleyway in Jaipur, India. Photo: Annie Spratt/Unsplash

Private equity (PE) and venture capital (VC) investments from January to November 2018 touched $27 billion, surpassing the record high of $26.1 billion in 2017, according to a report by consulting firm EY. November 2018 recorded $1.6 billion in PE-VC investments, 33% lower compared to the corresponding same month of 2017, and 49% lower than October. The fall in deal value was primarily due to lack of large deals ($100 million-plus), shows EY’s Private Equity Monthly Deal Tracker.

The month saw five large deals aggregating $950 million, while in November 2017 it took nine deals to arrive at the number. In October 2018, however, the combined value of six deals were worth $2.5 billion. Temasek-owned Mapletree Investments’ buyout of Chennai’s SP Infocity IT Park for $353 million was the largest deal in November.

In the 11 months ended 30 November 2018, acquisitions worth $7.4 billion were witnessed across 37 deals, which is more than the value of buyouts in the previous two years combined ($3 billion in 2017 and $3.9 billion in 2016).

Startup investments also saw a strong rebound in 2018 with $4.1 billion in VC and PE money, which is 17% higher than 2017, the report added.

“Though November 2018 has been a relatively weak month for PE-VC investments and exits, the momentum of PE-VC activity in India continues to be strong,” said Vivek Soni, partner and national leader (private equity services) at consulting firm EY.

“As we had forecasted at the start of the year, 2018 has emerged as the best year for PE-VC investments, with $27 billion till date, and we still have one more month to go.”

While investments touched a new record, exits were a damper, declining 85%, compared to the $2.7 billion witnessed in November 2017, to $394 million. It was also significantly lower than the $1.4 billion of exits recorded last month. The largest transaction in November saw CPPIB exit its 80% stake in SP Infocity IT Park for $283 million. There were no PE-backed IPOs in November 2018.

In the 11 months ended 30 November 2018, acquisitions worth $7.4 billion were witnessed across 37 deals. Graphic: Mint

In the 11 months ended 30 November 2018, acquisitions worth $7.4 billion were witnessed across 37 deals. Graphic: Mint

This article was first published on livemint.com