PE investments in India touch $14 bn till Oct: Thornton

Sharp rise largely driven by IT & ITES, energy & natural resources, manufacturing, banking & financial services, telecom and pharma

Private equity investment in India till October this year soared close to $14 billion, registering a steady growth over last year but the average deal size has come down, says a report by Grant Thornton.

According to the assurance, tax and advisory firm, there were 863 private equity deals worth $13.83 billion during January-October period, as against 497 such transactions worth $10 billion in the same period a year ago.

The sharp rise in PE transactions was largely driven by sectors like IT & ITES, energy & natural resources, manufacturing, banking & financial services, telecom and pharma, which attracted large investments.

Meanwhile, the October private equity deal tally saw a 73% rise in investment volumes, but values declined by 40% due to shrinking size.

"Private equity investments are building up but the average deal size has come down by 20%, perhaps as a large chunk of PE money has been invested in early-stage companies or start-ups," the report added.

During October, IT & ITES continued to be the preferred sector for PE/VC investments, with 67% of total deal volume. Within this sector, the e-commerce space witnessed more than 50% investments.

Moreover, sectors like energy & natural resources, manufacturing, banking & financial services also witnessed some big ticket PE investments of over $100 million.

"On the private equity front, energy and natural resources together with BFSI contributed over 45% of total deal values," Grant Thornton India Partner Prashant Mehra said.

Some of top PE-deals during October include ReNew Power Ventures raising $265 million in fresh equity from new and existing investors, including from an arm of Abu Dhabi Investment Authority and Goldman Sachs.

Global private equity firm General Atlantic Singapore Fund's 22% stake acquisition in IIFL Wealth Management, the wealth management subsidiary of IIFL Holdings, for $173 million, was the other major deal during October.

The report noted that the outlook for deal activity looks bullish going forward.

"With all the macro indicators looking positive, the current traction will continue to grow. Moreover, amidst the visibility of more on ground action around the government's key policy and reforms, the stage is set to witness a high growth in the deal activity for the next few quarters," Mehra added.