Private equity and venture capital cross $2 bn in Apr: Report

Aggregate deal value in April saw a decline of 8% even as the number of deals increased 29%

The private equity (PE) and venture capital (VC) investments crossed $2 billion for the second consecutive month in April, primarily led by big ticket deals and strong buyout activities, says an EY report.

Despite a significant number of large transactions of over $100 million, the aggregate deal value in April 2017 saw a decline of 8 per cent even as the number of deals increased 29 per cent, over the corresponding period last year.

"April was another strong month both for PE investments and exits. Buyouts have clearly been the standout highlight of the year and we see buyout activity only get stronger with time," Mayank Rastogi, Partner and Leader for PE, EY said.

There were seven deals greater than $100 million, accounting for almost 59 per cent of aggregate deal value ($906 million) in April 2017 as compared to three ($885 million) in April 2016 and four ($173 million) in previous month.

"The PE model is slowly but surely moving towards value creation and it bodes well for India at large. This helps creating stronger, more competitive businesses leading to a number of collateral benefits such as capacity building, skill development, greater job creation, and improved tax revenues," Rastogi said.

Buyouts accounted for 45 per cent of the total deal value with $906 million recorded across six deals.

Top buyout deals include Capital Square Partners' $275 million buyout of Aegis Limited from Essar, Macquarie's $250 million buyout of Hindustan Powerprojects, True Norths and co-investor's $200 million investment in Religare Health Insurance Company for a 80 per cent stake.

From a sector perspective, financial services led the activity with transactions worth $316 million across nine deals, followed by Technology with ($306 million across 15 deals).

The report said Canadian pension funds further added to their India investments with two large deals (over $100 million). They accounted for almost a third of all investments in the January-March quarter of this year.