Private equity firms invested about $1.94 billion across 88 deals during the quarter-ended June 2014, according to early data from Venture Intelligence, a research service focused on private company financials, transactions and valuations in India. The investment amount was about 28 per cent lower than that invested during the same period last year ($2.69 billion across 114 transactions) and 20 per cent lower than that invested during the immediate previous quarter ($2.43 billion being invested across 109 transactions).
There were four PE investments worth $100 million or more (with one above $200 million) during Q2'14 compared to eight such transactions (including three over $200 million) in the same period last year and five (including three over $200 million) during the immediate previous quarter, the Venture Intelligence analysis showed.
E-Commerce player Flipkart's $210 million round - led by Russia-based DST Global - was the largest PE investment announced during Q2'14. Flipkart, which has been attracting new investors from around the world into India with regularity over the last couple of years, has now raised $750 million in all.
The next two largest transactions were in the pharmaceuticals sector and involved investors who have been operating in India for over a decade now -- Temasek and Warburg Pincus. While Temasek paid a reported $170 million to buyout fellow PE investor ChrysCapital from Intas Pharma, Warburg Pincus committed to invest $150 million in Laurus Labs including buying out the stake held by previous investor Fidelity Growth Partners India.
Flipkart competitor Snapdeal.com ensured it did not get left behind in the e-commerce fund raising game and collected another $100 million - this time from investors like Temasek and Premji Invest along with global asset management firm BlackRock and a couple of Hong Kong-based hedge funds.
With national election results out only in the last month of the quarter and the new rules imposed by the New Companies Act delaying a few deal closures, investors squeezed through bets on "safe sectors" in Q2'14. Led by the mega deals in e-commerce and pharmaceuticals, the IT & ITeS and, Healthcare & Life Sciences industries accounted for 67 per cent of the investment pie during Q2' 2014, the Venture Intelligence research showed.
The other prominent investments in IT included the Google Capital-led $31 million investment in Social CRM software maker Freshdesk; the Axon Partners and Madison India Capital-led $28 million for remote tech support firm iYogi; the SAIF Partners led $25 million investment in online ticketing firm Bookmyshow and the IDG Ventures and Vertex Ventures led $23.2 million investment in online travel services firm Yatra.com.
In addition TPG Growth announced a $100 million commitment to a joint venture with the Smile Group, called Katalyzers, that will help Silicon Valley based Internet and Mobile companies rollout their businesses across Asia Pacific, West Asia and Africa.
In healthcare, hospital and clinics operators that attracted investors during Q2'14 included Aster DM Healthcare ($66.4 million from existing investors Olympus Capital and India Value Fund); Vasan Eye Care ($50 million from existing investors GIC; Sequoia Capital and Westbridge Capital) and KIMS Hospital ($36 million from new investor ICICI Venture).
Among other pharmaceuticals sector deals, Jubilant Pharma, a spin off from publicly-listed Jubilant Life Sciences, attracted a $60 million commitment from IFC; Ascent Capital chose to invest about $20 million in Alivira Animal Health (a veterinary drugs focused joint venture between two publicly-held companies -- SeQuent Scientific and Shasun Pharmaceuticals); while ChrysCapital invested $11.4 million in publicly-listed Torrent Pharmaceuticals.
Food & Beverages companies (including Pepsi bottler Varun Beverages, Sulva Vineyards and Maiyas Foods) and BFSI firms (led by private sector banks like Ratnakar Bank and City Union Bank and SME lenders like Vistaar Finance and AU Financiers) accounted for 7 per cent each of the investment pie.