IT sector records $11.5 bn deal value

Grant Thornton-IVCA report says high-deal value largely driven by big ticket e-commerce PE investments and large cross-border acquisitions by IT majors

Led by e-commerce private equity investments, the technology sector in India recorded the highest deal value of $11.5 billion from around 400 deals in 2014, says a report.

According to a Grant Thornton-IVCA report, the high deal value in this segment this year was largely driven by big ticket e-commerce PE investments along with large cross-border acquisitions by leading IT majors.

The trend has continued into this year as well with large IT and BPO players looking at cross border acquisitions to consolidate service offerings and expand geographic coverage.

"India, from being merely a technology adapter or importer, is now becoming a creator for technology enabled disruptive solutions," Grant Thornton India LLP Partner Harish H V said.

Going forward, the outlook for corporate India's deal making spree looks bullish amid a stabilising capital market, stable government and hopes of new reforms.

Indian Private Equity & Venture Capital Association (IVCA) President Arvind Mathur said: "VC/PE is swiftly becoming the avenue of choice for dynamic companies seeking finance to fund their growth plans."

Harish said: "The presence of a complete life cycle of investors from angel, to seed to VC to PE to Public has no doubt contributed to this trend and we can safely say that the ecosystem for a start-up is in place and that combined with entrepreneurship has resulted in an explosive growth of start-ups and deal activity."

Over the last two years, e-commerce or technology enabled companies have shown significant growth in both volume and value of deals.

E-commerce accounted for 30 per cent of the total value of deals in technology sector in 2012, which augmented to 75 per cent in 2014, the report added.