PE/VC investments: More exits this year with buoyant capital markets

The first eight months of 2017 saw a 51% jump compared to the whole of last year

Finding the right exit is a challenge for private equity (PE) and venture capital (VC) funds but 2017 has been easier on this count. The first eight months of 2017, from January to October, saw a 51 per cent jump compared to the whole of last year. One reason has been the buoyant capital markets.

According to data from EY India Private Equity Advisory Practice and VCC Edge, the value of all exists between January and October has been $10.06 billion in 2017, as compared to $6.67 bn in the full-year period of 2016 and $6.47 billion in 2015.

The use of initial public offers (IPOs), open market and secondary market saw a surge. Buybacks and strategic sales saw a dip. 

The secondary market reported 527 per cent growth to $3.34 bn, as compared to $0.53 bn in 2016. Open market sales grew 117 per cent to $3.63 bn, from $1.68 billion and IPOs saw 72 per cent growth to $1.57 billion, from $0.91 billion.

Vivek Soni, partner and leader for PE Advisory at EY India, says the year, so far, has been the best-ever for PE/VC exits. With buoyant capital markets, these exits during the January-October period were more than 150 per cent higher than what was seen in 2015-16. 

"With two months to go, we project PE/VC exits for 2017 to close at about two times the levels seen in 2015-16," he said.

Such a strong show on exits indicates growing maturity of the Indian PE/VC market. Enthused by the existing trend, more capital is being committed. Soni furthers expects investment levels to increase by up to 25-30 per cent, as compared to the 2015 record high.