1. January-September private equity deal values drop almost 50%

January-September private equity deal values drop almost 50%

Private equity (PE) deal values for the nine months ending September this year have declined by almost 50% compared with the year before.

By: | Updated: October 5, 2016 2:47 PM
Private equity (PE) deal values for the nine months ending September this year have declined by almost 50% compared with the year before. (Representative Image: Reuters)

Private equity (PE) deal values for the nine months ending September this year have declined by almost 50% compared with the year before. (Representative Image: Reuters)

Private equity (PE) deal values for the nine months ending September this year have declined by almost 50% compared with the year before.

According to data compiled by VCCEdge, PE funding into Indian companies dropped to $8.8 billion across 945 deals this year so far, as against 1,245 deals worth $16.7 billion in the corresponding period last year. In the September quarter, deal-making activity declined by 45% to 258 deals as compared with 469 for the same period last year, and 11% lower than the previous quarter. Private equity investments dipped significantly by 63% to $2.3 billion in the Q3 CY16 as compared with $6.3 billion (a peak) a year ago and 3% higher than the already dismal previous quarter.

However, despite the dwindling PE deals, M&A activity remained a bright spot with Q3 CY2016 witnessing 232 M&A deals to the tune of $24,673 million, an increase of 242% compared with $7,206 million raised from 254 deals in Q3 CY2015. Deal values picked up for domestic M&As from $1.5 billion to more than $20 billion, while outbound deal value slipped by 58% during the quarter. The top three domestic M&A deals recorded in Q3 CY2016 were HDFC Standard Life’s purchase of Max Life Insurance for $ 9,730 million in August 2016, the Reliance Communication–Aircel merger deal of $7,300 million in September 2016 and Nirma buying into the cement business of Lafarge

India for $1,400 million in July 2016.

Among top PE-funded sectors, information technology witnessed the highest number of deals clocking 156 deals in total, amounting to $603 million. Consumer discretionary witnessed 44 deals worth $456 million while financial services registered the highest deal values, with $642 million from 14 deals altogether. Healthcare, with $180 million from 17 deals, was also among the top-performing sectors.

In comparison with Q3 CY2015, the information technology sector had garnered $2,015 million from 258 deals, consumer discretionary $2,133 million from 97 deals, financials $753 million from 24 deals and healthcare registered 27 deals worth $257 million. In terms of exits, information technology, with 13 deals amounting to $1077 million, healthcare with eight deals amounting to $612 million, and financials with 11 deals worth $168 million, were the top sectors.

The Slide

Private equity (PE) deal values for the nine months ending September this year have declined by almost 50% compared with the year before

According to data compiled by VCCEdge, PE funding into Indian companies dropped to $8.8 billion across 945 deals this year so far as against 1,245 deals worth $16.7 billion in the corresponding period last year

In the September quarter, deal-making activity declined by 45% to 258 deals as compared with 469 for the same period last year, and 11% lower than the previous quarter

Private equity investments dipped significantly by 63% to $2.3 billion in the Q3 CY16 as compared with $6.3 billion (a peak) a year ago and 3% higher than the already dismal previous quarter.

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