PE, VC investments slump to $3.04 bn in September quarter: EY

Private equity and venture capital investments in Indian companies nearly halved to USD 3.04 billion in the September quarter, mainly due to sharp fall in value of deals in the e-commerce space, a report said today.
Leading consultancy EY said there has been a decline in big deals (USD 100 million and above).
"Investments declined 49 per cent in value terms (USD 3.04 billion vs USD 6 billion in third quarter of 2015) and 44 per cent in volume terms (123 deals vs 220 deals in third quarter of 2015)," it said in a release.
According to EY, this was mainly on account of "sharp fall" in investments in e-commerce sector that dropped to USD 245 million across 19 deals in the latest September quarter.

In the year-ago period, the same stood at USD 2.1 billion across 57 deals.
The analysis is based on private equity and venture capital deals disclosed in the September quarter.

"The investments were expected to reduce as the e-commerce investing cooled down and that is how it played out. However, improving deal activity in sectors like real estate, green shoots in infrastructure and industrials are encouraging," EY's Partner and Leader for PE Mayank Rastogi said.
Some of the big deals in the three months ended September include Piramal Fund's debt of USD 376 million for various residential projects of Lodha Group and CDC Group's purchase of 15 per cent stake in India Infoline for USD 149 million.

"Deals in the startup and early stage recorded the lowest monthly figure for the year in September 2016 in terms of volume and second lowest in terms of value (USD 107 million recorded across 15 deals).
"Debt deals in September 2016 (USD 591 million, 9 deals) recorded the highest monthly figures in terms of both value and volume in 2016," EY said.
According to the release, exits increased by 64 per cent in value terms for the July-September period at USD 1.94 billion.
KKR's USD 542 million sale of Gland Pharma to Shanghai Fosun Pharmaceutical Group was the largest strategic exit in July-September quarter, it noted.

"Exits have only been improving and that is the big silver lining for the industry - third quarter has seen close to USD 2 billion returned to the investors, almost two-thirds of what got invested. This trend bodes well for the long term sustainability of the PE industry in India," Rastogi said.
During the September quarter, fund-raising witnessed a decline of 75 per cent to USD 320 million -- the lowest in past eight quarters, as per EY.
Meanwhile, private equity-backed IPO tally has touched 12 so far in 2016, which is also the highest in the past five years.