‘PE deals hit 7-year high of $15.2 bn in 2014’

Total deal value size in the private equity sector rose to a seven-year high of $15.2 billion in 2014 and going forward this trend is likely to continue this year as well on improved investor sentiment, says a report.

According to a survey by Bain & Company, the deal value in the private equity (PE) segment -- including real estate, infrastructure and VC deals -- rose to a seven-year high of $15.2 billion last year, registering a 28 per cent spike from 2013. According to the survey, nearly three-fourths of Indian PE executives expect deal value size to increase between 10 per cent and 25 per cent in 2015.

“PE activity continues to play a pivotal role in the country’s capital needs and we expect this trend to intensify as India’s economy strengthens,” Arpan Sheth, the head of Bain’s India Private Equity practice and lead author of the report, said. Looking at the year ahead, private equity partners in India expect a further increase in deal activity, driven by macroeconomic conditions, positive investor sentiment and an improved exit environment. Many PE firms are planning or have announced their next round of fund-raising and these firms include Everstone, Baring and Carlyle. 

In addition to this, several sovereign wealth funds have made large direct investments already-for example, the $376 million Private Investment in Public Equity (PIPE) into Kotak Mahindra Bank by Canada Pension Plan Investment Board (CPPIB).

“The potential for PE investment to support the India growth story is far greater than what we have seen so far,” Sheth said. Sheth added, “India needs to continue to improve its track record on ease of doing business, which the current government has started to do through labour reforms and its ‘Make in India’ programme.”