MoneyTree™ India Q1 2015

The first quarter of 2015 started on a steady note, attracting 2.8 billion USD across 130 deals. Although lower than Q4’14 levels (4.4 billion USD), it was still 15% higher than the prior period (Q1 2014).

Banking, financial services & insurance (BFSI) was the most active sector, attracting 891 million USD in investments while the information technology (IT) & IT-enabled services (IT&ITeS) sector was relatively quiet at 836 million USD with no significant e-commerce investment.

While the fundamentals appear to be getting better, with declining inflation,lower interest rates and a growing GDP, overall investor sentiment seems to be waning compared to six to nine months ago. Although the appetite to invest is there, market sentiment seems to swing all too quickly from one end to the other. One hopes the next two quarters will show a definite direction in which way investors are swaying.

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 private equity investments - Q1 2015

Investments by industry - Q1 2015

Interesting observations from this report:

“This quarter saw a decline in the total investment in the IT&ITeS space as compared to the previous quarter. However, overall value remained higher than most quarters. As has been the trend over the past year, investments were dominated by the e-commerce companies, with ShopClues, Freecharge, CarDekho and PolicyBazaar leading the pack. Among e-commerce companies, demand for funding from early-stage enterprises is likely to be strong in the coming year. These companies offer a wide variety of innovative products and are aided by sustainable business. Additionally, robust profitability models could bring huge opportunity for returns for PE firms.”

Sandeep Ladda, Technology Sector Leader, PwC India

“The deals trends are quite remarkable and reflective of the change in the underlying mood of the economy. With more positive energy and enthusiasm, expectations of growth have also seen an uptick and investors are returning strongly to the lead sectors such as financial services and IT&ITeS. It is clear that there is a shortage of long-term capital and investment in many sectors in India and for the growth potential to be converted to reality over the next decade, such investments need to be brought in now.”

Manoj Kashyap, Financial Services Leader, PwC India

“The healthcare sector saw a higher-than-average deal size of 43.5 million USD in the quarter compared to 10 million USD in the previous quarter and 7.14 million USD in the same quarter a year ago. Three of the leading healthcare chains underwent transactions for fresh equity infusions and secondary transactions in order to provide exits to existing investors during this quarter. Some of the leading diagnostic and single-speciality hospitals are planning IPOs in the coming months which will allow retail investors to enter the fray.”

Kameswara Rao, Healthcare Leader, PwC India