Private equity investors put in more money in fewer companies in 2013, M&A deal value improves 25%: VCCEdge Study

Jan 06 2014, 12:23 IST
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Deal volume on the other hand dipped 13% to 655 deals from 751 deals in 2012, VCCEdge data showed. Deal volume on the other hand dipped 13% to 655 deals from 751 deals in 2012, VCCEdge data showed.
SummaryDeal volume on the other hand dipped 13% to 655 deals from 751 deals in 2012, VCCEdge data showed.

Private equity investments in India have increased 12% in value terms from $9.5 billion in 2012 to $10.68 billion in 2013, according to annual transactions data released by VCCEdge, financial data platform of VCCircle.com.

Deal volume on the other hand dipped 13% to 655 deals from 751 deals in 2012, VCCEdge data showed.

"This shows private equity investors have been investing larger monies in fewer companies in 2013, an indication of winning companies attracting larger capital," Sahad P.V., Founder & Editor, VCCircle.com, said. "PE investors have been choosy."

Financials, consumer discretionary, and information technology were the most targeted sectors with investments worth $2.7 billion, $1.8 billion, and $1.6 billion, respectively. Together, the three sectors accounted for nearly 58% of the total private equity capital invested in 2013, the VCCEdge data showed.

The $1.26 billion investment by Qatar Foundation Endowment in Partners in New Delhi based Bharti Airtel Ltd. was the biggest deal announced during the year. This is followed by the $470 million investment in Alliance Tire Group by KKR India Advisors for a 90% stake.

Private equity exits:

Private equity exit transactions in 2013 amounted to about $3.6 billion coming from 158 exit deals compared to the $4.86 billion worth of exits spread across 172 deals in CY2012.

However, the industry saw some of the larger PE exits like Warburg Pincus exiting Alliance Tire Group and TPG exiting Shriram Transport Finance.

Mergers & Acquisitions:

As for mergers & acquisitions in India in CY2013, the deal value increased by about 25% to $26.17 billion as against $20.93 billion recorded in 2012, VCCEdge data showed. Deal volume, however, inched up only from 761 deals to 781 deals during the period.

Energy and materials sectors witnessed the maximum M&A value with deals worth $6.02 billion and $5.23 billion, respectively. Together, they accounted for nearly 43% of the total M&A deal value seen during the year.

The biggest M&A deal recorded in 2013 was the acquisition of Rovuma Offshore Area 1 of Anadarko Petroleum Corp. by ONGC Videsh Ltd. for a total consideration of $2.64 billion. This was closely followed by the $2.51 billion (in cash and stock) acquisition of Holcim India Pvt. Ltd. by Ambuja Cements.

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