Private equity, VCs pump in $1.6 bn investment through 50 deals in August

Private equity (PE) and venture capital (VC) investments stood at $1.6 billion across 50 deals in August, with buyout deals recording two times increase in value compared to the year-ago period, says a report.

According to EY's private equity monthly deal tracker report, August 2018 recorded $830 million across 18 exits with two $200 million plus deals.

"PE/VC activity continued its strong run with $1.6 billion investments received in August 2018. Till August end, the sentiment towards India remained strong, with funds further adding to their dry powder, as evidenced by $2 billion raised during the month, adding to the already high levels of dry powder of close to $40 billion available for investment into the country," EY's partner and national leader (private equity services), Vivek Soni, said.

During the reporting month, four deals were recorded of value greater than $100 million, accounting for 72 per cent of total investments against $4.7 billion recorded across six deals in August 2017.

KKR's $530 million buyout of 60 per cent stake in Ramky Enviro Engineers was the largest deal in August 2018.

From a sector point of view, power and utilities led with $532 million investments across two deals followed by real estate with $360 million invested across two deals.

Financial services, which has been one of the top sectors over the previous months, recorded just $42 million in investments across six deals.

In terms of number of deals, technology with seven deals was the leader, the report said.

Year-to-date, PE/VC investments till August 2018 have crossed $18.7 billion, 9 per cent higher compared to the same period last year.

During August 2018, 18 exits totalling $830 million were seen, which is double the value compared to July 2018.

The largest exit in the reporting month includes $225 million part exit from Ola a cab aggregator, by Helion Ventures, Accel India, Bessemer and others in a secondary sale to Temasek.

The other large exit during the month saw Warburg Pincus sell 8.3 per cent stake in AU Small Finance Bank for $223 million in the open market.

Moreover, the successful closure of the $16 billion Walmart-Flipkart deal in early September would trump all exits so far in the country's PE/VC industry and also eclipse the dollar value of exits in all of 2017.

There was one PE-backed IPO in August 2018, which saw Micro Ventures exit its stake in Credit Access Grameen for $71 million, the report said.

There were $3 billion worth fund raise plans announced in August 2018.

The largest fund raise of $695 million was made by Sequoia with a focus on early and growth stage investments in the technology, consumer and healthcare sectors, the report said.

Soni said with the sudden depreciation in the rupee seen in September, investors may turn cautious, which could delay the closure of deals.