MoneyTree™ India Q3 2016

The first nine months of 2016 witnessed 12.7 billion USD worth of private equity investments across 473 deals, as compared to 15.9 billion USD across 628 deals in the first nine months of 2015, indicating a 20% decline in deal value and a 25% decline in deal volume. 

As compared to the second quarter of 2016, despite a slight decline in the number of deals, deal values were up by 4% in Q3, with investments worth 4.3 billion USD across 131 deals as compared to 4.2 billion USD across 156 deals in Q2. Late- and growth-stage investments accounted for the majority of funding this quarter, contributing 84% in terms of value. 

Investments in this quarter were dominated by the Banking & financial services sector which accounted for 45% of the total investment value, with 1.9 billion USD across 20 deals. The IT & ITeS sector was the second largest sector in terms of value with 1.2 billion USD invested across 68 deals. 

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Total private equity investments – Q3 2016

Investments by industry – Q3 2016

Interesting observations from this report:

BFSI has seen significantly higher investment quarter on quarter even as overall investment flow is lower. We expect that distressed asset players, Fintechs, real estate funds and even non-banking financial companies (NBFCs) may see continuing investment despite global and domestic head winds for Indian deals in the next few quarters.

Bharti Gupta Ramola, Leader, Financial Services, PwC India

This quarter saw two major developments, the US elections and the demonetisation scheme by the Indian government, which might have significant long-term impact on the Technology and eCommerce industry. In terms of activity in the IT & ITeS space, deals continue to happen, albeit at a slower pace. This year has seen the startup market undergoing a valuation correction, and several startups have begun controlling their burn rate and are focusing on strong unit economics. The Fintech space saw several marquee investments this quarter and we saw the addition of another Indian company in the list of Unicorn startups, when Hike Messenger raised USD.175 million, at a valuation of 1.4 billion USD.

Sandeep Ladda, Leader, Technology, PwC India