MoneyTree™ India Q3 2014

Q3 ’14 saw 103 PE deals, valued at 3.01 billion USD, a 4% increase over the PE deal value in Q2 ’14 and a 97% increase over the deal value in Q3 ’13.

It may be too simplistic to attribute the heightened activity to the ever-improving macro-economic environment, but the latter did play its part. Inflation was at 6.46% in September 2014 and the cooling off in crude prices meant that fiscal deficit was broadly in control. More importantly, investors see a government keen on making investments into the country easier, and one that is focussed on enabling infrastructure for that purpose. This is great news for private equity investors looking to exit investments of four-plus-years vintage.

The IT & ITeS and healthcare sectors showed significant PE deal activity, followed by energy, education and engineering & construction. With the launch of the government’s Make in India programme and the proposed labour reforms, the manufacturing sector is also expected to gain investor interest.

For all the details, read or download the pdf of the full report (at right), or check out the highlights below.

Preview some charts inside this report

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Total equity investments - Q3 2014

Investments by industries - Q3 2014

Interesting observations from this report:

"Renewed market sentiments following the formation of the new Government along with significantly improved overall business confidence resulted in strong results this quarter. In the technology sector, e-commerce businesses continued to attract investor interest driven by strong growth prospects. The e-commerce market continues to be a primarily minority stake market, with the majority of deal flow driven by growth-stage deals. Newer online e-commerce business segments such as classifieds, real estate, grocery and healthcare, have started to exhibit significant growth opportunities. Looking ahead, companies in m-commerce and digital technologies (SMAC) are expected to be in favour.”

Sandeep Ladda, Technology Industry Leader, PwC India

“The decline in investment value in Q3 ’14 over the previous quarter is due to a fewer number of deals of ticket size over 100 million USD in this quarter as compared to the previous one. However, on a year-over-year basis, the investment value in healthcare and life sciences is up by almost 50%, with the average deal ticket size going up from 12.25 million to 26.54 million USD, thereby showing the continued uptrend in sector appetite to absorb larger sized deals.”

Dr Rana Mehta, Executive Director, Healthcare, PwC India

“Financial investors in the power and utilities space are now focussed almost entirely on clean technology where policy and regulatory frameworks have been remarkably positive and stable over the years. The central government’s focus on energy security and renewable energy is now finding support at the state level, with several announcing new policies and procurement.”

Kameswara Rao, Power & Mining Leader, PwC India