PE deals gain traction as volumes double in July: Report

There were 110 PE deals worth $2.15 bn in July this year as against 55 deals worth $1.85 bn a year ago

Private equity deals worth $2.1 billion were sealed in July, taking the tally to $9.21 billion for January-July of 2015, according to a Grant Thornton report.

According to the tax and advisory firm, there were 110 PE deals worth $2.15 billion in July this year as against 55 transactions worth $1.85 billion in the year-ago period.

"Volumes in PE investments have shown a 100 per cent growth over the corresponding month last year with a steady 16 per cent year-on-year increase to $2.2 billion in deal values, marking the highest activity in 2015," the report said.

"PE activity continues to show promising trends as overall macro level indicators look positive whereas domestic M&A activity has been slipping," said Grant Thornton India Partner Prashant Mehra.

Sector-wise, PE players continued to prefer IT and ITeS, which saw more than 60 per cent jump in volume, while telecom, real estate and manufacturing sectors witnessed some big-ticket deals worth over $100 million.

The IT and ITeS sector remains in a sweet spot, contributing more than 35 per cent of total deal values, followed by telecom (23 per cent) and real estate (15 per cent).

Mehra added: "... With the GST Bill's clearance a possibility, inflation under control, an expected increase in government spending, likely more rate cuts and better earnings prospects, M&As will perhaps swell. IPOs will probably also witness an upward movement as companies raise both primary and balance-sheet repair capital."

Major PE deals in July include TA Associates and India Value Fund Advisors' investment of around USD 500 million in broadband services provider Atria Convergence Technologies (ACT) and Warburg Pincus' USD 28 million in Ajay Piramal Group's Piramal Realty.