MoneyTree™ India Q1 2017

The new year 2017 has had a very strong opening quarter in terms of private equity (PE) investments. Q1 ’17 recorded total investments worth around 6.8 billion USD in 130 deals. This is a new high for PE investments over the last decade—second only to the approximately 6.9 billion USD attracted in Q3 ’15. The Information technology & IT-enabled services (IT & ITeS) sector reclaimed the top spot this quarter, seeing a 318% jump in deal value despite a 40% decline in deal volume compared to the last quarter.

Late-stage investments accounted for almost 44% of the investment value this quarter, while the value of PIPE deals increased almost threefold over the last quarter of 2016 to around 1.6 billion USD.  From an exit standpoint, this quarter recorded the second highest activity in the last decade, with around 3.2 billion USD across 53 exits, a 72% increase in value over the previous quarter and a 37% increase in value over the same period last year.

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Total private equity investments -- Q1 2017

Investments by industry -- Q1 2017

In terms of deal activity, the first quarter saw the IT & ITeS space continue to account for a large share of overall deal value despite a drop in volume. Although the quarter witnessed large investments in Indian eCommerce players such as Flipkart, Ola and Paytm, for the most part, the segment saw funds drying up due to the rationalisation of investments and start-up valuations. However, the rise of India-focused technology venture funds, the government’s structural reforms such as the Goods and Services Tax (GST) and the recently announced digital measures in Budget 2017 are likely to accelerate deal activity in the segment.

Sandeep Ladda
Leader, Technology
PwC India