February PE, VC inflows increase 51% to $2.6 bn; exits at $472 mn

Mumbai: Private equity and venture capital investments jumped a healthy 51 percent in February to touch $2.6 billion, driven by higher number of large deals, says a report.

According to the data collated by consultancy Monday, February saw investments worth $2.6 billion across 61 deals and exits worth $472 million involving 10 deals.

Both investments and exits were supported by improvement in deal activity in listed securities as stability in financial markets after the volatility in the previous few months, it noted.

It observed that February saw nine large deals worth $1.8 billion as against four large deals worth $655 million in February 2018 and four large deals totalling $1 billion in January 2019.

Softbank and Carlyle's $415 million investment in Delhivery was the largest deal in the month and also the largest PE/VC deal in the logistics sector ever, it said.

During the month, two buyouts worth $262 million compared to four buyouts worth $273 million a year ago.

Startup investments stood at $156 million across 32 deals, down 52 percent from $325 million across 31 deals.

Credit investments were at $548 million,the highest in previous 12 months on the back of a $350-million debt funding into ReNew Power by Overseas Private Investment Corporation of the US government, it said.

Financial services was the top sector with $712 million across 13 deals in February 2019 as against $619 million across 13 deals in February 2018, followed by logistics with $470 million across four deals as against one deal of $2 million in February 2018, recording its highest ever monthly investment on the back of the large investment in Delhivery.

E-commerce with $35 million across five deals against $362 million across nine deals a year ago, which is generally among the top sectors recorded a sharp decline in deal value, it observed.

It noted that exits were at $472 million, almost three times the value recorded in February 2018, on the back of a rebound in open market exits in wake of the volatility in the stock markets subsiding.

There were four open market exits worth $351 million, more than three times the value recorded in the same month last year and highest in past six months, it said, adding there was also one PE-backed IPO that saw Goldman Sachs and Kuwait Investment Authority-backed Chalet Hotels listing.

The largest exit in the month saw Bain Capital and GIC selling 5 percent in Genpact for $324 million, it added.

It observed that funds worth $285 million were raised and fund raise plans worth $779 million being announced. India Life Sciences Fund raised $250 million for its third fund was the largest fund raising.

"With large investments by Softbank and buyouts by funds like Blackstone, True North, Aion, the appetite of PE/VC funds for deals appears to be strong, notwithstanding prevailing uncertainties around global growth and impending general elections beginning next month.

Underlying deal activity remains robust across large and mid-sized deals, although valuations appear to have corrected for many sectors compared to pre-September 2018 levels. We think 2019 could very well be one of the best vintages year for Indian PE/VC investments," EY partner and national leader for PE Services, Vivek Soni said.