Press release

10 Sep 2019

Year-to-date PE/VC investments in India at a new all-time high of US$36.7 billion: IVCA-EY report

INDIA, 10 SEPTEMBER 2019. According to the IVCA-EY monthly PE/VC roundup, August 2019 recorded investments worth US$4.4 billion across 82 deals, on the back of 16 large deals of value greater than US$100 million and strong investment activity in infrastructure and real estate asset classes. Exits recorded US$691 million across 11 deals on account of large secondary exits.

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  • Infrastructure and real estate investments accounted for 35% of all PE/VC investments in August 2019, compared to 23% in August 2018
  • Growth, buyout and start-up deal segments - each recorded over US$1 billion investments
  • Exits via secondary sale recorded the highest deals value worth US$350 million

August 2019 records investments worth US$4.4 billion, 39% more than August 2018

According to the IVCA-EY monthly PE/VC roundup, August 2019 recorded investments worth US$4.4 billion across 82 deals, on the back of 16 large deals of value greater than US$100 million and strong investment activity in infrastructure and real estate asset classes. Exits recorded US$691 million across 11 deals on account of large secondary exits.

Vivek Soni, Partner and National Leader Private Equity Services, EY said,“As predicted by us at the beginning of the year, Indian PE/VC investment activity in 2019 has surpassed the all-time high of US$36.5 billion recorded in 2018. PE/VC investments in the first eight months of 2019 have breached the US$36.7 billion level, and given the deal momentum in various sectors, by the end of 2019, the total Indian PE/VC investment could potentially be in the range of US$48 billion to US$50 billion.

Large investments in the infrastructure sector, which has accounted for 35% of all PE/VC investments in India in 2019, have added real momentum to the Indian PE/VC investment activity. The infrastructure theme has witnessed interest from global buyout, pension and sovereign funds and this trend is expected to remain strong in the near-term. With both the Government as well as the private sector looking to monetize assets, we expect many more quality yield-generating assets to exchange hands, either directly or through InvIT structures.

While domestic factors like growth slowdown, tight liquidity, market sentiment and currency depreciation add to the prevailing uncertainty, seasoned PE investors are expected to forge ahead strongly. We continue to believe that 2019 could be one of the better investment vintages for the Indian PE/VC industry as notwithstanding the bumpy outlook in the short-term, LP and GP interest in India’s long-term growth prospects remains intact.”

Investments

PE/VC investments in August 2019 (US$4.4 billion) were 13% higher compared to August 2018 (US$3.9 billion), however were 47% lower compared to July 2019 (US$8.5 billion), which had recorded the highest monthly value of investments on the back of the large US$3.7 billion Brookfield-Reliance Jio deal. The total PE/VC investments in India now stand at US$36.7 billion, surpassing the previous high of US$36.5 billion recorded in 2018. In terms of number of deals, August 2019 recorded 39% higher deals compared to August 2018 and 27% lower compared to July 2019 (82 deals in August 2019 vs. 59 deals in August 2018 and 112 deals in July 2019).

From a sector point of view, infrastructure (US$803 million), real estate (US$764 million) and financial services (US$734 million) were the top three sectors in terms of PE/VC investments in August 2019. Investments in infrastructure and real estate sectors accounted for 35% of the total PE/VC investments in August 2019 compared to 23% in August 2018.

August 2019 recorded 16 large deals (value greater than US$100 million) aggregating US$3.3 billion compared to six large deals worth US$3.3 billion in August 2018 and 14 large deals worth US$7 billion in July 2019. Five out of the 16 largest deals in August 2019 were in infrastructure and real estate sectors, aggregating US$1.6 billion. GIC’s US$631 million investment in IRB Infra’s road platform was the largest deal in August 2019 followed by Blackstone’s buyout of Coffee Day’s Global Village Tech Park for US$400 million.

In terms of deal type, growth deals recorded the highest value of investments in August 2019 at US$1.6 billion across 20 deals, compared to 14 deals worth US$1.8 billion in August 2018 followed by start-up investments worth US$1.4 billion across 50 deals (US$ 182 million across 32 deals in August 2018) and buyouts at US$1.1 billion across six deals (US$1.7 billion across five deals in August 2018).

Exits

August 2019 recorded 11 exits worth US$691 million, 60% lower compared to the value of exits recorded in August 2018 (US$1.6 billion) and 9% higher compared to exits recorded in July 2019 (US$635 million). In August 2019, secondary exits were the highest at US$350 million across three deals followed by buybacks worth US$172 million across four deals. August 2019 saw one PE-backed Initial Public Offering (IPO) where Kedaara Capital, Helion Venture Partners and Valiant Capital made partial exits from Spandana Sphoorty in an offer for sale worth US$88 million.

The largest exit in August 2019 saw Gaja Capital, Partners Group and other shareholders sell their stake in EuroKids International Private Limited to KKR for around US$200 million and Multiples sell its 8% stake in Delhivery Private Limited to Canada Pension Plan Investment Board (CPPIB) for US$150 million.

Education (US$200 million) and logistics (US$150 million) were the top sectors in August 2019.

Fund raise

August 2019 recorded total fund raises of US$1.1 billion compared to US$2 billion raised in August 2018. In August 2019, Kotak Special Situations Fund raised the largest fund worth US$1 billion to target non-performing asset (NPA) opportunities.

Notes to Editors

About IVCA

The Indian Private Equity & Venture Capital Association (IVCA), is the apex body promoting the Alternative Investment Funds (AIFs) in India and promotes stable, long-term capital flow (Private Equity (PE), Venture Capital (VC) and Angel Capital) in India. With leading VC/ PE firms, institutional investors, banks, corporate advisers, accountants, lawyers and other service providers as members, it serves as a powerful platform for all stakeholders to interact with each other. Being the face of the Industry, it helps establish high standards of governance, ethics, business conduct and professional competence. With a prime motive to support the ecosystem, it facilitates contact with policy makers, research institutions, universities, trade associations and other relevant organizations. Thus, support entrepreneurial activity, innovation and job creation.

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