The month of July witnessed a 160% rise in private equity deal value at $5.47 billion compared to the same period last year led by Brookfield’s $3.7-billion investment in Reliance Industries’ telecom tower assets, according to the dealtracker report by Grant Thornton.
Despite an 8% decrease in deal volumes, the month witnessed a 2.6x increase in the PE deal values, the report said. July recorded 71 PE deals worth $5.5 billion comprising one deal in the billion dollar club and six deals valued at and over $100 million each.
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The start-up sector continued to occupy the larger share of volumes with 59% dominated by retail segment, followed by transport and logistics, ed-tech, auto-tech, enterprise application, and infrastructure. Energy, infra and IT sectors attracted big ticket investments of over $100 million each.
On a year-to-date basis, PE investment values soared 1.7x despite a 6% fall in deal volumes, showing increased average deal size. Also, the year so far recorded only five qualified institutional placement (QIP) issues of $995 million compared to 26 issues worth $2.2 billion recorded in year-to-date (YTD) 2018. “Similar to QIP activity, only 10 initial public offerings (IPOs) were raised worth $1.5 billion compared to 21 IPOs worth $4.3 billion raised in YTD 2018,” the report said.
Pankaj Chopda, director, Grant Thornton India, believes the tax and regulatory environment in India continues to be conducive for enhanced PE deal activity.
“In particular, the liberalised ECB framework widens the foreign source funding options for economically-distressed business units. While telecom, start-up, energy and infra sectors attracted high value investments from both strategic and financial investors, start-up, IT, banking and e-commerce sectors remained active, pushing the PE deal volumes during the month,” he said.