Private equity (PE) transactions in India are expected to touch a record $22.3 billion by the end of 2015, crossing the previous record of $17.1 billion set in 2007, according to a report by Bain and Co.
The transactions will be led by an uptick in investment activity in consumer technology, real estate and banking, financial services and insurance (BFSI) sectors.
The deal flow in the first nine months of the year has already touched $16.7 billion, exceeding the investments made during the same period last year by 58%. In 2014, the total deal flow was about $10.6 billion for the nine months ending September.
On an average, about 250 deals took place every quarter in the first nine months of 2015, the report indicates.
About 65% of all deal flow came from consumer technology, real estate and BFSI sectors. The top 10 deals—including Flipkart’s $700 million fund raising in July, Snapdeal.com’s $500 million fund infusion led by Alibaba and Foxconn and payment service provider Paytm’s $635 million funding from Alibaba—contributed nearly 25% of total private equity deal value in the nine-month period in 2015.
According to the report, average deal size also increased to $21 million, a 19% increase over same period in 2014.
The first nine months saw an uptick in early-stage investments that accounted for 67% of all deals, the report said.
However, industry experts have raised concerns of over-valuation about India’s e-commerce and consumer technology start-ups. There are already indications that the pace of funding could slow going forward.
Mint reported in September that hedge funds Valiant Capital, Falcon Edge Capital, Steadview Capital, Tybourne Capital and Hillhouse Capital, which were actively funding Indian consumer Internet start-ups last year and early this year, appear to have slowed the pace of their investments.
The report also states that exit values have grown at 2% to reach $4.8 billion, driven by public market sales and the key sectors of exit were BFSI, real estate, and telecom.
(The database does not include transactions where the deal value is not disclosed.)