PE deals see marginal dip in Apr; Jan-Apr tally at $4.84 bn

Private equity deals worth $1.89 billion were announced in April, registering a marginal decline over the same month last year, even as the average deal size witnessed an increase, says a Grant Thornton report.

According to the assurance, tax and advisory firm there were 63 PE deals worth $1.89 billion last month while in April last year 89 such transactions worth $1.99 billion were seen.

"PE activity has been almost at par with the last year, contributing $1.9 billion to deal flows, but demonstrated growth on average deal size as compared to April 2015," Grant Thornton India LLP Partner Prashant Mehra said.

For the first four months of the year, PE investments saw a marginal increase of 6% in value and 11% in number of transactions, taking the January-April deal tally to $4.84 billion by way of 343 deals.

A sector wise analysis shows that in PE space, manufacturing contributed around 16%, however the usual suspects like, IT & ITeS sector continued to dominate the space with a 44% contribution to deal values.

Top deals from April included Blackstone-Mphasis deal worth $827 million and Fairfax India Holdings' 30% stake acquisition in Sanmar Chemicals Group for $300 million.

Going forward, the deal outlook looks bullish as besides some development on the reforms front, there has been a repo rate cut to 6.5% earlier this month.

"These will generally enable the macro growth and should eventually also translate into a better business earnings environment," Mehra said adding "sustainable growth which is an essential ingredient for deal flows will need emphasis on issues related to land, labour, tax and the overall ease of doing business".