Private Equity deals lose lustre, slump to 5-year low, value down 27%

Private equity transactions languished at a 5-year low as the number of deals declined 45 per cent and investment value 27 per cent year on year, says a News Corp VCCEdge report.

According to News Corp VCCEdge's India Quarterly Deals report for January-March of 2017, there were 238 deals worth $3.04 billion as against 432 deals worth $4.19 billion in the same period last year.

In fact, angel investments were at a 4-year low too at $28 million, with VC investments dropping by 14 per cent year-on-year.

"PE sentiment seems to be extremely cautious and this is clearly reflecting in market performance. Appetite for risk is low with consolidation, job cuts and rollback of funding plans under way," said Nita Kapoor, Head India, New Ventures, News Corp, and CEO, News Corp VCCircle.

However, the average deal value for the first quarter of this year was the highest in 15 quarters, largely driven by the Bharti Infratel transaction.

"The top private equity deal for the quarter was the Bharti Infratel-KKR-CPPIB deal -- which at $946 million pushed up the average deal value," News Corp VCCEdge said.

Kapoor further said a drop in deal value with a simultaneous decline in exit figures is worrisome though these are early days and a bounceback is possible, if not probable in the immediate future.

In terms of cities, Delhi-NCR and Mumbai together attracted a bigger share of PE deals than the aggregate figure of Bengaluru, Hyderabad, Chennai, Pune, Kolkata, Jaipur and Ahmedabad.