MoneyTree™ India Q4 2014

Buoyed by the fourth quarter’s performance, private equity (PE) investments in India in 2014 surged by over 30% with a total investment value of 12.7 billion USD compared to last year’s 9.8 billion USD.

The surge in the yearly investments can be attributed mainly to the increasing interest in e-commerce, which saw a total investment of over 2.5 billion USD, and the fourth quarter has not been that different. The information technology and information technology-enabled services (IT & ITeS) and tech sectors attracted 59% of the total investment, with most of the money invested in e-commerce, and bumped up by considerable investments in Flipkart and Snapdeal.

We expect the growth in PE investments to continue in 2015, anticipating even higher levels of growth backed by economic reforms on the horizon.

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

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Total equity investments - Q4 2014

Investments by industries - Q4 2014

Interesting observations from this report:

“The last quarter of 2014 saw the highest investment (in terms of value) in the IT & ITeS space in the last decade. Within IT & ITeS, e-commerce investments had the highest contribution this quarter, led by marketplaces such as Flipkart and Snapdeal, and aided by niche companies such as OlaCabs and Year 2014 saw investments in the e-commerce sector, which is helping the industry to scale up. Leaders have started emerging in the various business models (marketplace, self-owned, private label and flash sales). In 2015, e-commerce will continue to see strong growth due to growing penetration beyond the metros, as well as the depth of number of products and services provided online. This is fuelled by improvements in 3G connectivity, improving last-mile delivery capabilities, mobile wallets, demographic dividend, etc. Furthermore, consolidation, which started in 2014, is expected to continue in 2015.”

Sandeep Ladda, Technology Industry Leader, PwC India

“While internal policy changes such as hikes in FDI in insurance will be one of the lodestones, the actual money on the table will depend on decisions emanating from global flows. Looking at the health of the banking sector, one can expect flows into BFSI in areas such as asset reconstruction companies, recapitalisation of banks and e-commerce where action is expected due to the payment banks ecosystem.”

Manoj Kashyap, Financial Services Industry Leader, PwC India

“The renewable energy segment continues to attract strong inward investment given the continuation of a positive policy and regulatory outlook. The central government intends to further boost prospects for renewable energy, especially in wind, solar and biomass segments, and we expect to see investments not just in power generation but also in their manufacturing facilities and in services. Further, the proposed amendments to the Electricity Act 2003, in particular, on open access and competition should draw more interest into power trading and power exchanges.”

Kameswara Rao, Power & Mining Industry Leader, PwC India