PEs offload $1.79-bn stakes in April-June qrtr: PWC

Majority of exits in this quarter came from IT, ITeS and manufacturing sectors

Private equity players offloaded stakes worth $1.79 billion in the second quarter of this calender year, registering a five-fold growth from the year-ago period.

According to a research note from PwC, in the April-June period, PE exits were valued at $1,782 million through 30 deals, a more than five-fold growth in value and an increase of 15% in terms of volume over the corresponding period last year.

In the second quarter of 2012, there were 26 exits worth $321 million.

PE firms generate returns and realise investments in a company through 'exits' using options like an initial public offering, a trade sale, selling to another private equity firm or a company buy-back.

On quarter-on-quarter basis, the exit activity in this quarter has doubled. In the April-June period, there were PE exits worth $1,782 million from 30 deals as compared to $884 million $from 29 deals in Q1 2013.

The majority of the exits in this quarter came from the IT and ITeS and manufacturing sectors which together contributed around 57% of the total exit value and 53% of the total volume, the PwC report said.

With 10 deals worth $539 million, the IT and ITeS sector topped the list of PE exits in terms of value, followed by the manufacturing sector, which witnessed an exit of $472 million from six deals.

The energy, education, engineering and construction sectors also witnessed a spurt in the exit value in the April-June quarter, PwC said.

However, the BFSI sector witnessed an 18% drop in the exit value along with a 50% drop in the volume, from $391 million (six deals) in Q1 2013 to $322 million (three deals) in Q2 2013.

The preferred modes of exits in Q2 2013 were through public market sale (nine exits) and strategic sale (seven exits). The other modes were secondary sale (six exits), buyback (six exits) and two exits through IPO.

In Q2 2013, secondary sale fetched the highest exit value, worth $798 million (about 45% of the total exit value), PwC said.