Private equity investments up 4% in Q3: PwC study

Mumbai: Private equity firms invested $2.5 billion in the country across 97 deals in the third quarter of this year.

The quarterly PE investments increased four per cent in terms of value, while deal volume fell by 20 per cent ($2.4 billion from 121 deals in Q3 of 2011).

With 45 deals worth $1.3 billion in Q3 of 2012, the IT and ITeS sector maintained its position as the leader in both value as well as volume.

The findings are part of the third PwC MoneyTree India report.

Sanjeev Krishan, Leader, Private Equity, PwC, said, “With the year having entered its last lap, it is quite unlikely that PE investments in 2012 will be on par with those in 2011.

“However, as we approach the year-end, the sentiment seems to be reviving and this augurs well for 2013.”

The opening up of the multi-brand retail sector to foreign investment is expected to generate investments in due course, and the requirement for 50 per cent investment in back-end operations and 30 per cent procurement from SMEs is set to boost private equity investments in the logistics, agri/food and consumer goods sectors in the times to come, he added.

The IT and ITeS sector attracted investments worth $1.3 billion from 45 deals, constituting more than 50 per cent of the total investment value and nearly 47 per cent of the total number of deals in this quarter.

The average deal size for the sector too, has shown an increase from $13 million in Q3 of 2011 to $29 million in this quarter.

In Q3 of 2012, PE exits were worth $1.5 billion from 26 deals compared with $809 million from 25 deals in the same quarter last year.