PE investments take Jan-Aug deal tally to $13.8 bn, e-tail contributes 51%

Private equity investment activity in the country improved in August following big-ticket transactions that drove the overall deal tally to as high as $13.8 billion so far this year, says a report.

According to assurance, tax and advisory firm Grant Thornton, there were 47 private equity transactions worth $4.96 billion in August, registering a significant jump over last year (August 2016) when deal tally stood at just $1 billion.

E-commerce sector dominated the private equity investment in value term, contributing to 51 per cent of total such investment in August, mainly driven by Softbank's $2,500 million funding in Flipkart.

The overall deal tally for the January-August period stood at $13.78 billion, a significant 75 per cent increase in value terms over the same period last year.

These deals "highlight the increasing cash burn and need for investment in the e-commerce segment and also increasing pressure on large debt laden corporates to dilute their stakes to reduce indebtedness," Grant Thornton India Partner Prashant Mehra said.

Mehra further said deal outlook for coming months looks bullish as "floatation of several maiden funds by ex-bankers/ entrepreneurs will continue to fund start-ups and create a chain for subsequent funding by larger investor groups".

In line with the trends in the last two years, August was dominated by investments in start-ups which contributed to 66 per cent of total deals, in terms of volume.

Startups in sectors such as enterprise application and infrastructure, health tech, on-demand services and retail space attracted significant attention from investors with over 58 per cent investment, in volume terms.

Other sectors which attracted big-ticket investments ($100 million and more) were real estate, energy, banking and startup, the report added.