PE investments, akin to venture capital, had a good 2019. The total deal value hit $37-billion mark -- highest since 2015 -- on the back of large ticket infrastructure sector deals.
Private equity (PE) investments, akin to venture capital, had a good 2019. The total deal value (amount invested) hit $37-billion mark — highest since 2015 — on the back of large ticket infrastructure sector deals. The top five investments in 2019 included $3.6 billion in Reliance Tower Infra followed by $1.8 billion in Reliance Pipeline Infra, $1.1 billion in GMR Airports, $1.07 billion in GVK Airports, and $1 billion in Paytm. The increase in 2019 funding amount, however, was marginal — 2.2 per cent from 2018 investment of $36.1 billion, according to data from Venture Intelligence.
On the other hand, the deal volume (number of investments), declined by 8 per cent to 861 investments in the current year from 937 in 2018. In the five-year period, 2015 saw the highest number of PE deals — 967. 2019 had 74 deals worth $100 million or more (accounting for 74% of the total investment value in 2019) out of which 40 deals each were larger than $200 million while five investments were over $1 Billion, according to the data shared. The top five investments included $3.6 billion in Reliance Tower Infra followed by $1.8 billion in Reliance Pipeline Infra, $1.1 billion in GMR Airports, $1.07 billion in GVK Airports, and $1 billion in Paytm.
In terms of top industries attracting maximum capital, infrastructure topped the chart with 40 per cent of the PE investment ($14.7 billion across 74 deals) vis-a-vis 20 per cent share in 2018 ($7.8 billion in 83 deals). The energy sector, on the other hand, saw 26 investments worth $4.9 billion in 2019 led by Brookfield’s $1.9 billion investment in Reliance Pipeline Infra compared to $3.2 billion in 31 deals last year. This deal “also extended into telecom sector, with the Canadian investor agreeing to invest almost $3.7 billion in an SPV that will acquire a controlling stake in Reliance Jio’s tower infrastructure company,” the report on PE investments said. The Airport development businesses of the Hyderabad-based GMR and GVK groups also saw significant capital infusion in 2019.
IT & ITeS sector attracted 32 per cent of PE investments in the year — $11.8 Billion across 493 deals led by $1 billion investment in Paytm. The sector had received $10.9 Billion in 482 deals in 2018. Other sectors that saw highest investments were telecom with around $4.3 billion investments, BFSI with approximately $4.2 billion, travel and transport saw around $2.5 billion funding, around $1.8 billion in healthcare, $1.7 billion in engineering and construction, and around $4.4 billion in others.
“The sheer diversity of investors that are now actively investing in India – by geography (including North America, Asia and the Middle East) as well as sector preferences – provides scope for optimism that the momentum will be maintained into the New Year,” said Arun Natarajan, Founder, Venture Intelligence.
With respect to venture capital, a total of 887 startups in 2019 raised $14.5-billion in funding — marking around 26 per cent jump from last year, according to the data shared by Tracxn. 2017 deal value was nearly $15 billion while for 2018 it was around $11.5 billion. The number of funding rounds, like PE, also went down from the previous year. From around 1,550 rounds in 2017, the figure went south to around 1,400 in 2018 and further to 1,185 rounds in 2019. Nine new unicorns, according to Venture Intelligence, emerged in India including Dream11, BigBasket, Delhivery, Druva Software, Ola Electric, Rivigo, Citius Tech, Icertis, and Lenskart.