PE deals dry up, investments in India ease to 3-year low

Private equity space turned off-colour in May as PE investments slid to a three-year low due to absence of sizeable amounts, says a report.

According to Grant Thornton, the global advisory, tax and assurance firm, there were 71 PE deals worth of $518 million clinched in May while it was 68 transactions worth $1,248 million in the same month last year.

"While the deal momentum is good, there will be some big-ticket transactions, especially in the PE space," Prashant Mehra, Partner at Grant Thornton India LLP, said.

The PE investment activity increased marginally in volume terms, but investment value fell to the lowest in the last three years. Outlook for this space looks bullish though.

"As India remains a hot favourite for PE investors, the government's ongoing measures towards easing statutory regulations and ease of doing business will perhaps facilitate those large investments," Mehra added.

May was dominated by investments in start-ups which contributed 72% to total volumes.

Start-ups in sectors like travel, transport and logistics, education, financial and health technology took pole position.

The consolation is May saw one of the largest investments this year in Indian technology ecosystem, with Khazanah committing $100 million in Fractal Analytics.

"IT and ITeS along with start-ups and e-commerce segments have ruled the sector trend this month, contributing almost 45 per cent to the total deal values across M&As and PEs," Mehra said.