The Indian private equity market has registered its highest ever exit in 2017, a Bain and Company report finds, adding that the trend is set to continue in 2018, boosting the sentiment of a buoyant stock market. “The exits have registered their best year ever, growing by more than 60 percent to $15.7 billion in terms of value, signaling confidence by investors and the public market was the preferred exit mode, which can also be seen as a measure of confidence in the Indian markets,” Bain and Company said in the report.
According to the report, exits were driven more by transaction value, than an increase in deal volume and more than 200 exits took place in 2017. “The total exit value grew by more than 60 percent to $15.7 billion, while the number of exits increased 7 percent,” the report said adding that the top 10 exits together constituted 40 percent of total PE exit value in 2017, slightly less than in 2016 (45 percent).
While the exits have been at an all-time high, the investments into the country has also touched their highest level in 2017. The report said that the PE market in India saw a record year in 2017 with $26 billion of PE/VC investments, the highest amount ever, where the top 10 players were involved in almost two-thirds of the deals by value. The total investments in 2017 at a whopping $26 billion, represents a 60 percent increase over 2016.
Arpan Sheth, partner at Bain & Company, one of the authors of the report said pointed out that 2017 was a great year for the private equity market in India. “Improving economic indicators, formalization of the economy, and a proactive government addressing the NPA issue are all contributing to India sustaining as an attractive destination for PE investments,” he said.
Pointing out various reasons for the growing investor confidence in the markets, the report said that regulatory action and government stimulus to address non-performing assets (NPAs) and a growing formal economy coupled with unification of taxation under the new GST, were the significant factors.