PE investments up 37% in Jan-Mar

Chennai: Private equity investments during the January-March grew 36 per cent to $5.44 billion in 117 deals from $4 billion in 198 deals in the same period a year ago, according to research firm Venture Intelligence.
Flipkart and Ola are back in fund-raising mode in 2017, however at significantly lower valuations. Flipkart has $1 billion in commitments from China’s Tencent and other investors and Ola has received commitments of $330 million from SoftBank and other existing investors.
The number of investments was, however, 41 per cent lower in January-March than in the year-ago period. These figures include venture capital investments but exclude private equity investments in real estate. “Almost $3.6 billion, or two-thirds of the total value of investments during the period, was announced in March,” said Arun Natarajan, chief executive officer of Venture Intelligence.
The research firm expects a few more large deals closed at the end of March to be announced this week. There were 11 private equity investments worth over $100 million in January-March against 12 such transactions in the same period last year. Many of the larger deals involved secondary sales by either promoters or existing investors. Telecom tower firm Bharti Infratel saw parent Bharti Airtel sell a 10.3 per cent stake to KKR and Canadian pension fund CPPIB for $952 million. CPPIB also invested $720 million in infotech firm GlobalLogic, providing an exit to Apax Partners.
True North, formerly India Value Fund, exited Manipal Health through a $215 million stake sale to Temasek and entered a new hospital chain, KIMS Group, through a $200 million investment that provided exits to Ascent Capital and OrbiMed.
Infotech companies accounted for 53 per cent of the private equity investment value during the period, attracting $2.9 billion in 64 transactions. The value of infotech investments was up 106 per cent from $1.4 billion in 115 deals in January-March 2016.
Finance companies attracted $498 million investments in 17 deals in January-March 2017, followed by health care companies at $496 million in eight deals.
With 68 investments, venture capital investment deals in January-March fell 47 per cent from the same period of 2016 to its lowest point since April-June 2014.
Venture capital investment worth $314 million in January-March was 17 per cent lower than the figure in the same period of 2016. The fall was cushioned by a few large growth stage investments. Early stage investment activity — seed capital to Series B deals — fell by as much as 50 per cent from the same period in 2016.
Infotech companies accounted for 74 per cent of the investments by activity, but education (Cue Learn), health care (iGenetics Diagnostics) and microfinance (RGVN NE Microfinance) are grabbing investors’ attention. “Given the nervousness around expensive consumer Internet and mobile bets and the significant capital available with venture capital firms, this is probably the best time for non-consumer focused start-ups to draw investor attention,” remarked Natarajan.
Accel India, Aarin Capital and the Ratan Tata family office, which were active last year, slowed down their pace of investments in January-March. IDG Ventures India stood was an exception, announcing eight investments during the period.