Private equity and venture capital firms have invested a record $10.1 billion across 159 deals for the quarter ended March 2019, according to data from Venture Intelligence, a Chennai-based research service focused on private company financials, transactions and their valuations. The investment value increased 26% compared to the $8 billion across 208 transactions recorded in the same period in 2018 and 39% higher than the immediate previous quarter (which had witnessed $7.3 billion being invested across 178 transactions). The latest quarter witnessed 23 PE investments worth $100 million or more (with 6 of them at $500 million or above) compared to 17 such transactions in the same period last year.
Infrastructure related companies, especially in energy, roads and telecom, accounted for 48% of the investment value during the period — accounting for $4.9 billion across 16 deals — compared to $3.7 billion across 13 deals in Q1’18.
“The sheer size of bets in the Infrastructure sector this close to the national elections speaks to the long-term investors that have been attracted to India in recent years,” said Arun Natarajan, founder, Venture Intelligence.
The largest investment reported during Q1’19 was Canadian asset management firm Brookfield’s $1.8 billion acquisition of Pipeline Infrastructure India — which owns the 1,400 km natural gas pipeline from Kakinada to Bharuch — from Reliance Industries. The second largest investment was the $715 million investment by Singapore sovereign wealth fund GIC in mobile services company Bharti Airtel.
“While average PE-VC deal sizes are up sharply, the fact that this has been accompanied by a rather steep fall in the number (or volume) of investments indicates selectivity,” he added.
In the latest quarter, deal volumes continued to fall not only in the venture capital segment (94 deals in the Q1’19 vs 124 deals in Q1’18), but in classic private equity segment (outside of venture capital) as well where the deal volume fell 23% (compared to both Q1’18 and the immediate previous quarter).
Among other top investments, global tech investor SoftBank invested in e-commerce focused logistics firm Delhivery and omni-channel baby products retailer FirstCry.
According to Venture Intelligence, BFSI (banking, financial services and insurance) was the second most favoured destination for PE investors in Q1’19 attracting $2.2 billion across 20 PE investments. Among the top investments in the sector was Carlyle’s acquisition of a 9% stake in SBI Life Insurance for $653 million.
IT & ITeS companies came in third, attracting $1.7 billion across 86 transactions. Among the larger investments in the sector, apart from FirstCry, were AION Capital’s buyout of InterGlobe Enterprises’ IT and back office unit (for $230 million), Apax Partners’ $200-million investment in Fractal Analytics and e-grocer BigBasket’s $150 million funding (led by Mirae Asset Management, Alibaba and CDC Group).