PE/VC investments in 2018 matched record levels of 2017: Grant Thornton

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Updated: March 29, 2019 5:28:34 AM

In terms of the size of PE/VC investments, the sharp increase in the investment values in 2018 was on account of 47 investments of value of $100 million or higher, including six $500-million-plus deals.

PE/VC investments, PE/VC investments in 2018, Grant Thornton, IT-enabled service, Grant Thornton IndiaBig-ticket investments were driven by complex deal structures, PE-backed M&A, later-stage funding and inflated start-up valuations.

Private equity/venture capital investments in 2018 stood at $20.5 billion, the same as in 2017, across 786 transactions, said Grant Thornton in a report. According to the seventh edition of Grant Thornton’s The Fourth Wheel 2019 report, the volumes were driven by tech-enabled start-ups, e-commerce and information technology (IT)/IT-enabled service (IteS).

In terms of the size of PE/VC investments, the sharp increase in the investment values in 2018 was on account of 47 investments of value of $100 million or higher, including six $500-million-plus deals. Big-ticket investments were driven by complex deal structures, PE-backed M&A, later-stage funding and inflated start-up valuations. Of the 786 PE/VC investments in 2018 and 736 in 2017, approximately 90% were sub-$50 million ticket size deals and deals with undisclosed values.

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“While it is not unusual to witness high levels of public spending in election years and it may push investments in rural and infrastructure-related sectors in the near term, core sectors may not get impacted as most mid-market investments take a long-term bet on growth potential. As a result, PE deal volumes are expected to pick up in the second half of the year, with 2020 being expected to be the year of highest volumes of PE investments,” the report stated.

Strategic and secondary sale were the preferred mode of exits contributing over 60% to exit values. E-commerce drove over 75% of disclosed exit values. Vrinda Mathur, partner at Grant Thornton India, said 2018 matched up to the record-breaking levels in 2017, signifying a trend rather than a one-time phenomenon in the Indian PE/VC history.

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