The deal street got off to a tepid start in 2017 with the first quarter numbers coming down heavily both in value and volume at USD 3.04 billion through 238 deals respectively, down 27 per cent from USD 4.19 billion in 432 deals.
"The first quarter of 2017 saw a 27 per cent decline in PE investments at USD 3.04 billion through 238 deals. In terms of volume this is down 45 per cent over 432 deals worth USD 4.19 billion a year ago," says News Corp VCCEdge.
This is the worst low in five years with activity down 45 per cent and investment value plunging 27 per cent on an annual basis. But average deal value is the highest in 15 quarters, thanks to the Bharti Infratel the primary reason, says the report.
Median deal value quadrupled to USD 2.25 million in Q1 compared to USD 0.6 million in Q1 of 2016. The top PE deal during the quarter was the Bharti Infratel-KKR, CPPIB deal of USD 946 million, pushing up the average deal value.
According to the report, the main reason for the sober beginning is the massive fall in angel investments which hit four-year low at USD 28 million while VC investments dropped 14 per cent.
As per VCCEdge, this investment value doubled against last quarter to USD 820 million in Q1, though this was a fraction of the USD2,500 million for a year ago. This was primarily because there were no fresh investments of USD 250 million or more from investors, during the reporting quarter.
Even exits by PEs and VCs fell during the reporting period with exits halving to USD1.4 billion in Q1 from USD 2.1 billion a year ago. Open markets dominated exit deal value at USD945 million, bouncing back as the preferred exit route.
In terms of regions, Delhi-NCR continues to rule the roost in deal activity at USD 1,246 million, against USD 692 million in Mumbai and USD 441 million in Bengaluru. Delhi-NCR and Mumbai together attracted a much bigger share of PE deals than Bengaluru, Hyderabad, Chennai, Pune, Kolkata, Jaipur and Ahmedabad put together.
The top four incoming PE deals were the Oman-India Joint Investment Fund II, KKR India Credit Fund, ICICI Venture Fund Management's India Advantage Fund Series IV and IDFC PE Fund IV, which together pumped in USD 641 million, while the key exits during the quarter were the Providence Equity Partners-Idea Cellular deal and the Khazanah Nasional Berhad- Apollo Hospitals deal.
In terms of sectors, information technology continued to dominate the space in Delhi NCR with 29 deals, followed by nine in consumer discretionary and four 4 each in consumer staples and industrials.
Coming second in terms of deal value was Mumbai with 47 deals amounting to USD 692 million with IT leading the way with 23 deals followed by consumer discretionary with seven deals and financials at six. Bengaluru saw 53 deals worth USD 441 million, almost 60 per cent of them in IT.