PE/VC investments register record high at $8.7 bn in Q3 2017

Private equity and venture capital (PE/VC) investments increased 180 per cent in value terms to a record $8.7 billion during the third quarter of the year (Q3 of 2017) on the back of some large deals, a report said on Tuesday.

According to EY's quarterly PE tracker for July-September 2017, PE/VC investments stood at $8.7 billion compared with $3.1 billion during the same period last year.

The PE tracker for Q3 of 2017 revealed that the PE/VC investments grew 17 per cent in volume terms at 141 deals as compared to 121 deals in 3Q2016.

"This was driven by almost a five-fold jump in minority growth capital investing, with $5.7 billion invested across 46 deals, the highest quarterly growth capital investment ever," said the report.

The EY tracker pointed out that two "mega deals" in the month of August contributed to the surge -- accounting for 45 per cent of deal value in 3Q2017 -- with Softbank investing $2.5 billion in Flipkart for a 30 per cent stake and GIC (General Insurance Corporation) investing $1.4 billion in DLF for a 33 per cent stake in its commercial assets business.

"According to EY's quarterly PE tracker for the third quarter of 2017, PE/VC activity in India witnessed a sharp increase across investments, exits and fund raise on the back of some large deals with size in excess of $200 million each," it said.

Vivek Soni, Partner and Leader for PE Advisory, EY said: "India is clearly maturing as a PE market with bigger and complex deals becoming more common place. Greater numbers of large deals and buyouts support this thesis and it is clearly visible in the 3Q2017 investment numbers."

From a sector perspective, ecommerce, real estate, and financial services were the leading sectors in terms of investments in 3Q2017, the report said.

The report added that exits grew 128 per cent by value during the quarter under review at $4.7 billion, while number of deals remained at similar levels, recording the best quarterly performance for exits since 2009.

"Improving exit performance over the last couple of years, supported in part by buoyant capital markets, have helped PE funds reaffirm their India thesis and give confidence to their LP's (limited partners)," said Soni.

"The good news is that there is massive amounts 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 buy-out deals in India," he added.

--IANS

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