Merger and acquisition (M&A) and private equity (PE) were worth $22.5 billion in the first quarter of 2018, a 24 per cent drop from the same period last year. However, the number of deals increased marginally.
The drop was attributed to the Vodafone-Idea merger, valued at $23 billion in the first quarter of 2017. If this is excluded, a three-time increase in deal values, according to Grant Thornton’s PE Dealtracker report. In 2018, PE investment rose a 76 per cent in value size. Eight investments garnered $100 million and above, and 11 attracted funds in the range of $50-99 million. Together, these contributed to 70 per cent of PE investment values. In March, PE investments witnessed 46 per cent growth in values, while volumes declined 16 per cent, indicating increased average deal size. The month recorded five investments of over $50 million each.
Compared to February, March saw a 5 per cent increase in deal volumes, while values registered a 25 per cent decline. It saw five investments valued at or above $50 million compared to 10 in February. In line with trends in the past 17 quarters, this one was dominated by investments in start-ups, 56 per cent of total investment volumes, garnering $679 million. The real estate sector dominated investment values with 37 per cent.
Pankaj Chopra, director at Grant Thornton India, said active deal making by domestic companies and continued interest of PE investors in real estate and the natural resources and energy sectors maintained deal activity.
PEs invested $ 4 billion across 200 investments, recording a 76 per cent increase in deal values.