The deal street got off to a tepid start in 2017 with the first quarter numbers coming down heavily both in value and volume at $3.04 billion (nearly Rs 20,224.36 crore) through 238 deals respectively, down 27% from $4.19 billion (nearly Rs 27875.02 crore) in 432 deals.
The deal street got off to a tepid start in 2017 with the first quarter numbers coming down heavily both in value and volume at $3.04 billion (nearly Rs 20,224.36 crore) through 238 deals respectively, down 27% from $4.19 billion (nearly Rs 27875.02 crore) in 432 deals.
"The first quarter of 2017 saw a 27% decline in PE investments at $3.04 billion through 238 deals. In terms of volume this is down 45% over 432 deals worth $4.19 billion a year ago," says News Corp VCCEdge.
This is the worst low in five years with activity down 45% and investment value plunging 27% on an annual basis. But average deal value is the highest in 15 quarters, thanks to the Bharti Infratel the primary reason, says the report.
Median deal value quadrupled to $2.25 million in Q1 compared to $0.6 million in Q1 of 2016. The top PE deal during the quarter was the Bharti Infratel-KKR, CPPIB deal of $946 million, pushing up the average deal value.
According to the report, the main reason for the sober beginning is the massive fall in angel investments which hit four-year low at $28 million while VC investments dropped 14%.
As per VCCEdge, this investment value doubled against last quarter to $820 million in Q1, though this was a fraction of the $2,500 million for a year ago. This was primarily because there were no fresh investments of $250 million or more from investors, during the reporting quarter.
Even exits by PEs and VCs fell during the reporting period with exits halving to $1.4 billion in Q1 from $2.1 billion a year ago. Open markets dominated exit deal value at $945 million, bouncing back as the preferred exit route.
In terms of regions, Delhi-NCR continues to rule the roost in deal activity at $1,246 million, against $692 million in Mumbai and $441 million in Bengaluru. Delhi-NCR and Mumbai together attracted a much bigger share of PE deals than Bengaluru, Hyderabad, Chennai, Pune,
Kolkata, Jaipur and Ahmedabad put together.
The top four incoming PE deals were the Oman-India Joint Investment Fund II, KKR India Credit Fund, ICICI Venture Fund Management's India Advantage Fund Series IV and IDFC PE Fund IV, which together pumped in $641 million, while the key exits during the quarter were the Providence Equity Partners-Idea Cellular deal and the Khazanah Nasional Berhad- Apollo Hospitals deal.
In terms of sectors, information technology continued to dominate the space in Delhi NCR with 29 deals, followed by nine in consumer discretionary and four 4 each in consumer staples and industrials.
Coming second in terms of deal value was Mumbai with 47 deals amounting to $692 million with IT leading the way with 23 deals followed by consumer discretionary with seven deals and financials at six. Bengaluru saw 53 deals worth $441 million, almost 60% of them in IT.
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