A trader works on the Mizuho Americas trading floor in New York, U.S. (Photographer: Michael Nagle/Bloomberg)

Private Equity Investments Bounce Back; April Sees $3.16-Billion Deals

Private equity (PE) investments in India saw a significant upturn in April with deals worth $3.16 billion, up 69 percent from a year ago, due to big ticket transactions. From a 32-month low recorded in February this year, the deal tally in April represents a significant bounce back both in terms of number of deals as well as value.

According to assurance, tax and advisory firm Grant Thornton, there were 86 PE deals worth $3.16 billion in last month, while 63 such transactions worth $1.87 billion were announced in April last year. Eight large deals valued at over $100 million contributed to around 70 percent of the total PE deal values last month.

"April clocked over 100 transactions valued at around $5 billion (including M&As), which was almost at par with last year's activity. While M&A contributed around $2 billion, the key driver was PE which contributed around $3 billion from around 90 transactions," Prashant Mehra Partner at Grant Thornton India LLP said.

In the January-April period this year, PE investment values saw a marginal increase with 8 percent rise in investment values while volumes declined by 20 percent over the corresponding period last year.

A sector-wise analysis shows that PE/VC investments in start-ups contributed 52 percent of total deal volume, with sub-sectors like health tech, data analytics and AI, and travel, transport & logistics space witnessing more than 42 percent investments in last month.

PE deals were dominated by telecom, driven by Bharti Airtel Ltd.’s stake sale in its subsidiary Bharti Infratel Ltd. to KKR and Canada Pension Plan Investment Board in order to reduce its debt.

Other sectors such as information technology (IT) and IT enabled services (ITES), real estate, pharma, banking and energy also attracted large investments of over $100 million last month.

“While most of the traction has been witnessed in the technology sector, contributing over $1.7 billion, there was traction in the other core sectors as well like Financial Services and Pharma. Two major transactions in April were: the investment in Flipkart valued at $1.4 billion; and the PE investment of $950 million in Bharti Infratel,” Mehra said.