Investments reached the highest level for Indian private equity in 2017, according to a report published last week by Grant Thornton. Technology and Insurance are some of the key sectors to have boosted this growth.
2017: a year of exceptional results
According to the report by Grant Thornton, last year the Subcontinent saw 735 operations by institutional funds for the equivalent of 7 billion dollars. Compared to 2016, there was a decline in deals of around 26% but a 54% increase in value, demonstrating that there were a number of large transactions.
“2017 witnessed a robust increase in deal value primarily on account of increased number of large deals and improved exit environment. Increase in interest shown by offshore investors contributed fairly well to the figures. Given the market dynamics, buyouts will be the most preferred investment strategy this year, along with follow on investments,” said Gopal Srinivasan, Chairman, IVCA.
When it comes to trending sectors, e-commerce witnessed the largest YoY jump over 2016, with $6 billion worth of investments from 33 deals, compared to $1 billion from 31 deals in the previous year. Moreover, start-ups, banking and financial services, real estate, and IT/ITeS also experienced an increase in investments. As Business Today reports, ‘technology as an enabler’ has been a strong theme in the investment world since 2015. Indeed, E-commerce, start-ups, IT/ITeS and a portion of BFSI, all of which are technology-driven, have contributed to over 80 per cent of deal volumes and 57 per cent of deal values since 2015.
Surge in IPOs
Last year also saw a surge in IPOs with 37 issues aggregating over $10.7 billion so almost three times the IPO values of 2016, and most issues witnessing significant over subscriptions. As the report shows, many of the successful IPOs provided a smooth exit for Private Equity funds and this is therefore expected to accelerate PE investments this year. The top four IPOs, all in the insurance sector, accounted for 55 per cent of overall IPO equity raised.