Private equities bring $11 bn to India in 2014

The IT and IT-enabled services segment for 39 per cent of the overall PE funds

The priThis year, private equity (PE) funds pumped in $11 billion into Indian companies, 11 per cent more than last year, according to a report by Grant Thornton. While the overall merger & acquisition (M&A) volume in the country stands at $37 billion, the volume generated through qualified institutional placements and initial public offerings (IPOs) is $5 billion.

The information technology (IT) and IT-enabled services segment (ITeS)accounted for 39 per cent of the overall PE funds, while e-commerce continued to play a significant role in deals in India. “2014 clearly witnessed a significant surge in M&A and PE deal activity, with an increase of 26 per cent compared to 2013, in terms of the number of deals. This was largely driven by the resurgence in business sentiment due to the new government taking charge in May this year,” said Prashant Mehra, partner at Grant Thornton India LLP.

On the outlook for next year, Mehra said given the current sentiment on the deal-making front, he expected a sharp increase in deals across sectors especially health care and pharmaceuticals, IT/ITES, e-commerce and financial services. “We could also see a turnaround in deal momentum in the infrastructure and infrastructure-allied services sector, which was subdued in 2014. With the ongoing correction in real estate rentals, the retail and consumer sectors could also see a thrust in growth and, therefore, a boost in deal activity. Also, PE funds will continue to focus on exits. A robust IPO market and strong interest in inbound deals, expected in 2015, is likely to help exits,” he said.

 

Top PE deals of 2014
Investor	Investee Sector	US$ mn
Morgan Stanley Investment Management, GIC, Accel Partners, DST Global, Iconiq Capital and Sofina	Flipkart Online Services Pvt Ltd	1,000.00
Canada Pension Plan Investment Board	Kotak Mahindra Bank	366.67
Brookfield Property Partners	6 IT Parks in India	347.00
Capital Square Partners, CX Partners etc	Aditya Birla Minacs Worldwide	260.00
Naspers Ltd.; Tiger Global Management; DST Global; ICONIQ Capital	Flipkart Online Services Pvt Ltd	210.00
Softbank Corp	Olacabs	210.00
Warburg Pincus	Retail & Consumer	195.60
Temasek, IDFC Alternatives	Infrastructure Management	183.00
KKR	Infrastructure Management	164.20
Source: GrantThornton Dealtracker