Private equity investment in Indian firms dips

Mumbai: The private equity investment in Indian firms during the quarter ended March 2018 saw a 49 per cent drop due to a slowdown in the number of big-ticket deals over the same period last year.

According to Venture Intelligence, private equity (PE) firms invested about $3.7 billion across 133 deals in the January-March period as against 200 transactions worth $7.3 billion recorded in the same period last year.  

“The latest quarter witnessed only nine PE investments worth $100 million or more compared to thirteen such transactions in the same period last year,” noted Arun Natarajan, CEO of Venture Intelligence.

According to him, 2017 was exceptionally a good year for fund raising from both public as well as private investors. When compared to them, the first quarter numbers would suggest a slowdown. However, on a standalone basis, he said those numbers are still pretty good.  “Also notable was the fact that Softbank – which dominated 2017 with its mega e-commerce bets on Flipkart, Paytm, Ola and Oyo — did not figure among the top ten deals in Q1 2018,” Mr Natarajan added.

The only Indian investment by the Japanese investment giant so far in 2018 has been the relatively small follow-on investment of Rs 400 crore in e-grocer Grofers.

The largest PE investment reported during the quarter was the $1.06 billion preferential allotment by publicly listed mortgage lender HDFC Limited to investors including GIC, KKR and others including Canada Pension Plan.

The second largest investment in Q1 was the $275 million investment by TPG Capital in the resultant entity of the proposed merger between Manipal Hospitals and Fortis Healthcare.

Looking ahead, Mr Natarajan said that sectors such as banking, financial services & insurance, IT and healthcare would continue to see robust deal activities. However, deal activity in core infrastructure is likely to see some slowdown towards the end of this year due to 2019 polls.