Private equity investments volumes rise but values dip in Q3 of 2018

By: | Published: October 24, 2018 3:43 AM

The quarter recorded $1 billion investment, and 13 investments valued at above $100 million each, contributing 68% of total PE deal values.

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Private equity investments witnessed a significant 41% growth in the investment volumes, while the values dipped by 28% in the third quarter of calendar year 2018 (Q3CY18), mainly on account of reduced follow-up investment rounds this quarter as compared to Q3CY17, according to a deal tracker report by Grant Thornton.

The quarter recorded $1 billion investment, and 13 investments valued at above $100 million each, contributing 68% of total PE deal values.

Compared to Q2CY18, this quarter witnessed a healthy increase in deal volumes by 10%, while the values remained muted on account of reduced big ticket transactions. The last quarter recorded 18 big ticket transactions valued over $100 million compared to only 14 such transactions in this quarter.

The report further stated that in line with the trends in the last 21 quarters, the third quarter was dominated by investments in start-ups, which contributed to 60% of total investment volumes garnering $1 billion. Fintech attracted significant attention from investors with 20 deals, followed by retail and health tech segments.

The quarter witnessed some marque deals such as Abu Dhabi Investment Authority (ADIA) and TPG Capital’s investment in UPL Corp to enable the largest outbound acquisition in the agriculture sector. KKR’s investment in Ramky Enviro Engineers (REEL) marks one of the largest buyouts in India, in addition to being the first private equity buyout in the country’s highly attractive environmental services sector, the report said.

“The rupee has slumped to an all-time low amid an investor exodus from emerging markets, which threatened to dent business confidence, cautioning PE investors,” the report said. PE investments witnessed a 10% growth in deal volumes, while values declined by 6%, since the beginning of the year.

The year so far has seen 23 IPOs raising $4.6 billion, a 1.6x increase YoY . On the other hand, QIPs saw 28 issues raising $2.6 billion compared to 17 issues which raised $3.7 billion in the same period in 2017.

Start-up sector dominated both the PE deal volumes by 59% and PE deal values by 19%. However, real estate, energy, banking, agriculture and e-commerce sectors witnessed big-ticket transactions capturing 52% of total PE deal values, the report said.

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