Private equity investments up by 36% in Q1 of 2017

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Beating analyst expectations which had predicted a blip in private equity (PE) and venture capital (VC) investments due to a slowdown in startup funding, risk capital investors recorded a 36 percent jump in investment value in the January-March quarter 2017.

Fund managers are a happy lot as the increase in investment value signals an overall optimism about India’s economy and growing opportunities across all sectors in the country. What’s more, it also shows that India is a bright spot among emerging economies when there is news pertaining to slowing growth globally.

As per data available with Bengaluru-based Venture Intelligence, a research firm focussed on private company financials, transactions and their valuations, PE firms invested about $5.44 billion in the previous quarter as against $4 billion invested in the same period in 2016.

“Interestingly, almost $3.6 billion or two-thirds of the total value of the investments this year – were announced/reported in March alone,” said Arun Natarajan, CEO at Venture Intelligence.

The number of deals clinched in the last three months, however, is lower than the figure in the same quarter last year. Take a look: As many as 117 deals were sealed in the January-March period this year, while in last quarter of 2016 fiscal, the number of PE/VC transactions stood at 199. “The latest quarter witnessed 11 PE investments worth $100 million or more compared to 12 such transactions in the same period last year and 8 during the previous quarter, the Venture Intelligence data shows.

As far as the burgeoning ecommerce sector is concerned, unicorns such as Flipkart and Ola are back in fund raising mode in 2017, although at a lower valuation than what they had attracted in 2015. While Flipkart is reported to have attracted $1 billion in commitment as part of an ongoing $1.5 billion round from China’s Tencent and others, Ola is reported to have received commitments of $330 million led by SoftBank and other existing investors.

Moving away from the new age economy, telecom tower firm Bharti Infratel saw parent firm Bharti Airtel sell a 10.3 percent stake to KKR and Canadian pension fund CPPIB for almost $952 million. CPPIB also invested $720 million in IT services firm GlobalLogic providing an exit route for existing PE investor Apax Partners.

In terms of exits, True North (formerly India Value Fund) exited one hospital chain (Manipal Health via a $215 million sale to Temasek) and entered a new one (KIMS Group via a $200 million investment that gave an exit to Ascent Capital and OrbiMed).