Private equity, venture capital deals fall 30% to $13.6 billion in Jan-Sept 2016: Report

It said consumer technology, BFSI and IT were top investment sectors, accounting for nearly 55% of total deal value

Private equity and venture capital investment inflows into the country declined 30 per cent in the first three quarters of 2016, driven by fewer deals in the consumer technology segment, a report said.

"Deal volume decreased by nearly 25 per cent to 764 during the first three quarter of 2016 as against 1,032 in the same period in 2015, while deal value decreased at a steeper rate of 30 per cent to $13.6 billion from $19.1 billion last year," Bain & Company said in its report.

It said consumer technology, BFSI and IT were the top investment sectors, accounting for nearly 55 per cent of the total deal value.

Excluding consumer technology, which accounted for nearly 30 per cent of investment value last year, deal activity in 2016 is similar to 2015.

"Year 2015 saw a spurt of big ticket consumer technology investments at nearly $6 billion (30 per cent of total) driven by Flipkart, Paytm, Ola, Snapdeal attracting large deals of lessthan $500 million.

"However, 2016 has witnessed a slowdown in consumer technology at $3 billion (20 per cent of total)," the report said.

Leaving consumer technology, average deal size has increased to $25.1 million in 2016 compared to $19.7 million in 2015.

It said at current run rate, 2016 will likely end with $16.3 billion in investment value as against $23 billion in 2015 and $15 billion in 2014.

In Q3, private equity and venturecapital deal volume decreased by 24 per cent to 287 in from 387 a year ago.

"Deal value decreased by 45 per cent to $4.5 billion in Q3 2016 as against $8.2 billion in same quarter last year.

"BFSI turned out to be a key sector of interest as investments in the space increased from $0.6 billion in Q3 2015 to $1.4 billion in same quarter of 2016," it said.

Consumer technology, despite a slowdown ($1 billion in Q3 2016 as against $2.6 billion in Q3 2015), still remains the second largest sector by value.

Average deal size also decreased to $15.6 million in Q3 from $21.6 million, driven primarily by lower incidence (and size) of large deals less than $100 million.

The first three quarterssaw robust exit activity with total exit value at $6.9 billion increasing by 30 per cent over $ 5.4 billion in Q1-Q3 2015.

Key sectors for exits include manufacturing, healthcare and BFSI.

The third quarter has seen a spurt in exits with higher volume as well as value of exits, with a spike in strategic sales across sectors such as telecom, healthcare and IT, the report said.