Private Equity /Venture Capital investments have recorded a new high at $21.8 billion in 2017 so far, surpassing the previous record of USD 19.6 billion in 2015.
The funds have invested this money across 496 deals from January to October 2017. According to EY's monthly PE deal tracker, the increase has been primarily driven by a significant number of large deals of value $500 million and above and many involving big bets by global pension funds. Till date, 2017 has recorded seven such deals aggregating $8.6 billion, of which four deals were greater than $1 billion, in contrast to 2016 which recorded two deals worth $2.5 billion while 2015 recorded four deals worth $2.2 billion.
Vivek Soni, Partner and Leader for PE Advisory, EY said that October 2017 was another stellar month for the Indian PE/VC sector. The festive month saw a couple of cracker deal announcements which helped take the PE/VC investments for 2017 past the previous record high of 2015.
Continuing the trend of the record July-Aug-Sept quarter, which saw over $8.7 billion of PE/VC deal announcements, October 2017 has not disappointed.
October 2017 reported a 77 per cent increase in the value of investments, while in terms of volume it decreased by 6.6 per cent compared to the same period last year ($2.1 billion across 56 deals in October 2017 vs $1.2 billion across 60 deals in October 2016).
On a month-on-month basis, there was an increase of 16.7 per cent in value terms and 19.1% in terms of volume.
Two large deals accounted for 71 per cent of the total deal value. The largest deal saw Tencent and Softbank invest $1.1 billion in Ola cabs that would be used for investments in supply and technology, followed by CDPQ investing $400 million in Logos India Ventures that would be used to acquire logistics assets. Till date, 2017 has recorded four investments of value greater than $1 billion compared to just one last year.
In terms of deal type, October 2017 recorded the highest value and volume of investments into start-ups in a given month in 2017 ($505 million across 34 deals), while recording the lowest monthly value of PIPE deals in 2017 at $37 million.
E-commerce reported the maximum activity with $1.2 billion recorded across ten deals, followed by logistics, which recorded its highest ever monthly investments at $408 million across two deals. As mentioned, YTD PE/VC investments have eclipsed the highs seen in 2015, already making 2017 a record year for both investments and exits. With two months to go for the year-end, we expect to close the year with PE/VC investments 25-30 per cent higher than the 2015 record levels.