PE firms invest $2.3 bn in April-June quarter: PwC survey

On y-o-y basis, there was 18% surge in deal value in the second quarter of this year over the same period a year ago

After a dismal first quarter of the calendar year, private equity (PE) investments in the April-June quarter this year have more than doubled to $2.3 billion through 82 deals, a PwC report says.      

During the April-June period, PE firms invested $2,330 million across 82 deals, while in the January-March 2013 period had seen an investment of just $929 million through 66 deals.      On year-on-year basis as well, there was 18 per cent surge in deal value in the second quarter of this year over the same period a year ago, according to the PwC MoneyTree India report — a quarterly study of private equity investment activity based on data by Venture Intelligence.

Sector-wise, the manufacturing sector lead the April-June quarter with investments worth $796 million from six deals.

However, with 31 deals worth $453 million in Q2 of 2013, the IT and ITeS sector emerged as the leader in terms of number of deals and ranked second in terms of value.      

"Traditionally, the IT and ITeS sectors have been extremely lucrative for private equity investments. The sector has remained fragmented over the last few years, and so has the inflow of investments. Hence, consolidation may be in the offing in the near future," PwC Leader Technology Sandeep Ladda said.      

Ladda further noted "while the Indian rupee depreciation is likely to have a favourable impact on the IT and the ITeS segment, the sudden and large spurt in deals will only add a fillip to the otherwise gloomy global market".      

The energy sector witnessed the third highest investment in terms of value with investments worth $235 million from four deals as compared to $159 million from two deals in the previous quarter.      

Education, shipping and logistics sectors have reported a significant decline in the values and volumes of deals in this quarter as compared to Q1 '13 and Q2‘12.      

Meanwhile, the banking, financial services and insurance (BFSI) sector witnessed a considerable drop in investments from $264 million across 10 deals in the preceding quarter to $138 million from five deals in this quarter.      

Region-wise, Mumbai topped the chart, with highest level of funding at $1,193 million and with 20 deals, it had the majority share in terms of number of deals as well.      

The National Capital Region (NCR) has retained its place in the top three regions on the basis of the number of deals (16 deals), besides, the value of investments has shown a 95 per cent growth this quarter as compared to the preceding one.      
PE investments in Bangalore and Chennai, too, have shown an increase in the value of investments this quarter, as against the previous quarter, the report said.