PE, VC investments see sharp decline in February
Mumbai: The private equity (PE) and venture capital (VC) industry witnessed transactions worth $1.4 billion across 63 deals in February, down from $3.5 billion in January, according to EY’s private equity monthly deal tracker.
PE/VC investments saw a 60% decline in terms of value month on month in the absence of any mega deal, which has been the trend over the past few months, EY said.
February’s biggest deal was IIFL buying a 30% stake in NSDL e-Governance Infrastructure Ltd from IDBI Bank for $170 million.
This was followed by ASK Group’s $155 million investment in Shriram properties to set up a fund for investing in affordable, mid-housing and distressed assets, the report added.
“Deal activity clearly suggests that PE/VC investors have taken a breather in February 2018 after a hectic January. Global volatility spiked in early February, equity indices globally corrected, and India was no exception. Given the recent announcements by the US on trade tariffs, global volatility could continue well into March 2018,” said Vivek Soni, partner and leader for private equity advisory, EY.
However, on a year-on-year basis, investments grew by 256% ($393 million in Feb 2017) and in terms of volume, investments were more than twice the number of deals recorded in February 2017.
The financial services sector saw the most activity in February with investments worth $447 million across 13 deals, followed by technology, that saw investments worth $296 million across 14 deals.
February also witnessed 12 exits worth $234 million, a decrease in both value and volume compared to the previous month as well as February 2017.
“While PE/VC investing is about the long term, volatility does impact investor sentiment and consequently the timing of investments and exits. In our view, the India investment thesis for PE/VC investors is stronger than ever before. The data suggests that the underlying trend of a steady increase in value of PE/VC investments, exits and average deal size remains intact,” said Soni.
The largest exit in February 2018 saw Apollo Global selling its investment in Logix Group’s projects in Noida back to the promoters for about $74 million, marking its first exit from a real estate project since it started investing in the sector on its own in 2016.
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