PE exits, M&As & fund raising via IPOs hit 5-yr high in 2016: Report

2016 turned out to be a strong year for the Indian deal street as private equity exits, mergers & accusations (M&As) and fund raising through IPOs hit a 5-year high, says a report.

According to News CorpVCCEdge, the financial research platform of News CorpVCCircle, the M&A deal tally for the year hit $61.44 billion and private equity investors unlocked $6.79 billion worth of investments across 239 exits.

Fund raising via Initial Public Offerings surged to a five-year high with $4.12 billion raised across 93 IPOs, it said.

"While M&A activity in India perked up in 2016 thanks to a few multi-billion-dollar deals that companies struck either to slash debt or consolidate their market share, what we are seeing is the flow of angel/seed money into enterprises in sectors like fintech, healthcare, education and travel which will continue into 2017," said Nita Kapoor Head - India New Ventures News Corp and CEO News Corp VCCircle.

Kapoor noted, "there is a huge funding opportunity for start-ups operating in these sectors that succeed in delivering a good consumer experience".

According to the report, the M&A activity is going strong as there were 1,002 deals worth $61.44 billion, a jump of 159 per cent in value terms from 2015 which saw 995 deals at $23.71 billion.

"The hike in the M&A deal value can be attributed to the three deals worth $27.7 billion which include, Essar Oil, Max Life Insurance and Reliance Communications, Wireless Telecom Business acquisitions contributing 45 per cent of the overall deal value," the report said.

Moreover, the significant increase in exits also instils confidence in the deal activity.

While PE investors unlocked investments worth $6.79 billion across 239 exits in 2016, M&A exits were the flavour of the year contributing 43 per cent of the total exit activity closely followed by open market exits at 32 per cent.

2016 has been a record year for IPOs, wherein fund raising via IPOs surged to a five-year high with $4.12 billion raised across 93 IPOs as compared to $2.19 billion from 62 IPOs in 2015.

"Overall Equity Capital Market (ECM) deals constituting IPOs, follow-on offerings, rights issue, QIP and private placements increased by 18 per cent in 2016 with 116 deals as compared to 98 in 2015, however, capital raised dipped by around 20 per cent from $6.17 billion to $4.99 billion," the report said.