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The value of private equity and venture capital investments in Indian companies during the quarter ended March 2018 declined by 49 per cent to $3.7 billion across 133 deals, compared with $7.3 billion across 200 deals during the same quarter the previous year.
Large investments by PE investors was a decline during the quarter, bringing about a 29 per cent drop in overall investments when compared with the previous quarter, according to a report by Venture Intelligence, a financial and transaction research firm for private companies.
Investments during the quarter ended March were also the lowest in five quarters, owing to low value of investment by PE firms in deals. "The latest quarter witnessed only nine private equity investments that were worth $100 million or more, compared with 13 in the same period last year," said Arun Natarajan, founder and chief executive of Venture Intelligence.
"Also notable was the fact that Softbank, which dominated 2017 with its mega e-commerce bets on Flipkart, Paytm, Ola and Oyo, did not figure among the top 10 deals during the March quarter," he added. The only Indian investment by SoftBank so far in the 2018 calendar year has been the relatively small follow-on investment (of Rs 4 billion) in e-grocer Grofers.
The largest PE investment reported during the first three months of 2018 was the $1.06-billion preferential allotment by publicly listed mortgage lender HDFC to investors including GIC, KKR and others like Canada Pension Plan OMERS, Carmignac Group and Premji Invest. The second-largest was the $275-million investment by TPG Capital in the resultant entity of the proposed merger between Manipal Hospitals and Fortis Healthcare.
The other deals that saw investments of over $100 million included Lone Star’s $200-million investment in RattanIndian Finance, Prem Watsa-led Fairfax Holdings’ $180-million in Catholic Syrian Bank, Bay Capital Investments’ $141-million in Religare Enterprises, and Chinese major Tencent and others’ $115-million in Gaana.com.
With $1.5 billion worth of investments in non-banking financial companies alone, the Banking, Financial Services & Insurance sector ($1.9 billion) accounted for 51 per cent of all PE investments in value terms during the quarter across 14 transactions.
IT & ITeS companies, led by Tencent’s investment in Gaana.com, stood next, attracting $927 million across 79 PE investments, followed by Healthcare & Life Sciences companies, which attracted $361 million across nine transactions (of which the biggest was of the TPG -Manipal Health Enterprise).
Data show that investments in Indian BFSI companies more than tripled during the quarter, from $603 million in the quarter ended March 2017 to $1.9 billion during the quarter ended March, this year. The IT and ITES was the worst decline – from $4.18 billion in the quarter ended March 2013, to $927 million this year.
Healthcare and shipping & logistics sectors also saw a decline in terms of total investments during the three months ended March this year, while media & entertainment, other services and manufacturing saw growth when compared with the same quarter the previous financial year.