PE investments fall to $652 mn in Jan, from $1,120 mn last year: Report

Outlook for the coming months bullish due to GST and pragmatic Budget

Private equity investment activity has begun the new year on a sluggish note with January witnessing a decline in private equity (PE) investments both in volumes as well as value terms, says a report.

According to assurance, tax and advisory firm Grant Thornton, there were 79 PE investments worth $652 million in January this year, where as in the corresponding period last year there were transactions worth $1,120 million by way of 97 deals.

"PE activity continues to slip away both from a volume and value perspective," Prashant Mehra, partner at Grant Thornton India LLP, said, adding that it was the start-up sector which continues to lead the activity followed by media and entertainment.

A sector-wise analysis shows that despite decelerating PE/VC investments, the start-up sector displayed significant traction and contributed 62 per cent of total deal volumes and 28 per cent of deal values.

"The month witnessed fewer big ticket investments with only one investment valued over $100 million compared to three such estimated deals in 2016," the report said.

Warburg Pincus picked up 14 per cent in PVR for $120 million, and the transaction was termed as the deal of the month.

Other sectors such as media and entertainment, real estate and e-commerce also attracted large investments over $50 million during the month.

Mehra further said that the deal outlook looks bullish going forward.

"With the visibility on GST and demonetisation effect behind us, combined with the pragmatic Budget, domestic consumption and growth should see further acceleration," he said.