PE investments at record high of $8.7 billion in Jul-Sep

The quarter recorded the largest IPO exits ever with Fairfax selling its 12% stake in ICICI Lombard

Private equity/venture capital (PE/VC) investments touched a record high of $8.7 billion in the September quarter, a sharp increase over the last year, largely driven by big-ticket transactions, says an EY report.

According to EY’s quarterly PE tracker for July-September 2017, PE/VC investments stood at a record high of $8.7 billion,  against $3.1 billion in the same period last year.

The surge was driven by large transactions, with nine $200-million-plus deals in the said quarter, the report said, adding SoftBank’s $2.5 billion investment in Flipkart was the largest ever PE investment in India.

“India is clearly maturing as a PE market, with bigger and complex deals becoming more common. Greater numbers of large deals and buyouts support this thesis, and it is clearly visible in the third quarter 2017 investment numbers,” Vivek Soni, partner and leader for PE Advisory, EY said.

The quarter also saw record exits for PE players. Exits recorded a year-on-year rise of 128 per cent in value terms at $4.7 billion across 65 deals, driven by exits via IPOs, open market and secondary sale, EY said.

July-September recorded the largest IPO exits ever with Fairfax selling its 12 per cent stake in ICICI Lombard for $558 million.

"The good news is that there is a massive amount of dry powder available globally and most global funds are now keenly looking at India for investment opportunities. The compulsion of corporate India to deleverage by selling assets is expected to add momentum to the growth of buyout deals in India," Soni said.

In terms of individual sectors, e-commerce, real estate, and financial services were leading in terms of investments in July-September.

E-commerce recorded $2.6 billion across 18 deals primarily driven by Softbank's $2.5 billion investment in Flipkart. Real estate recorded $2.3 billion across 13 deals and financial services announced deals worth $1.4 billion across 25 transactions in the said quarter, the report noted.