PE investments surge in 2015

Private equity investment in India touched $13 billion in the first nine months of 2015 across 504 transactions. If the trend continues, PE investments this year are likely to beat the historical high of $14.7 billion across 535 transactions reported in 2007, according to a report by Venture Intelligence, a Chennai-based research service focused on private company financials, transactions and their valuations.

The numbers exclude investments made in real estate and strategic investments from players, such as Alibaba, says a release from Venture Intelligence.

PE firms invested $5.8 billion in 177 deals during the quarter ended September, up 125 per cent in value terms over the same period last year — $2.6 billion across 126 transactionhes and 38 per cent higher than the immediate previous quarter, when $4.2 billion was invested across 151 transactions.

In the third quarter, 16 PE investments worth $100 million or more were made. There were seven deals worth over $200 million, the report said.

Flipkart, Snapdeal and Ola raised $700 million, $500 million and $245 million respectively, while the other large PE investments include the $500-million deal by TA Associates and India Value Fund in ACT Broadband, Blackstone’s $383 million repurchase of BPO firm Intelenet from UK’s Serco, and Bain Capital’s $200 million infusion in L&T Finance, the report said. The large deals in the Internet sector along with the Blackstone buyout of Intelenet ensured that IT & ITeS companies grabbed 57 per cent of the total PE investment by value, attracting $3.3 billion across 107 deals, in the third quarter.

Other internet companies that attracted $100 million include music service Saavn.com, furniture e-tailer Pepperfry.com and hotels aggregator Oyo Rooms.

Energy companies surged to the second spot attracting $549 million across seven transactions led by the GIC — Greenko Group ($256 million), I Squared Capital — Amplus Energy ($150 million) and Macquarie – Ind-Barath Energy transactions. Growth capital investments in unlisted companies accounted for 68 per cent of the total PE investments in the third quarter. Buyout type investments saw a spurt in interest at 11 investments worth $1.1 billion, which was 26 per cent of the total pie in value terms.

Another notable transaction in the segment was KKR Special Situations Fund investing Rs.491 crore in polyester yarn maker JBF Industries.

StanChart PE, Apax Partners and Temasek acquired additional shares in existing listed portfolio companies Prime Focus, Shriram City Union Finance and Justdial respectively, via the public markets, the report said.