India deals rebound in 2014

Almost $11bn was invested by private equity in the country last year, a 47% increase year-on-year

As sentiment in India continued to rise, private equity firms invested the second highest amount ever recorded in the country during 2014.

The value of private equity dealflow in India reached $10.9 billion last year, a 47 percent increase year-on-year and second only to the record $14.5 billion invested by the industry in 2007.

Figures also show that investments are becoming larger in India, with the volume of investment roughly on par with last year at 436 deals, despite their combined value climbing by almost 50 percent.

The surge was driven by a number of outsized investments in online services companies, particularly in the e-commerce sector, which accounted for almost $4.1 billion (across 106 deals) or 37.6 percent of total investments in India during the year, according to Venture Intelligence data.

Flipkart and Snapdeal, two of India’s e-commerce giants, garnered close to $3 billion in financing from private investors, including Singaporean sovereign wealth fund GIC Private, Russia’s DST Global and the Qatar Investment Authority (for Flipkart) and Softbank Corp, BlackRock Asset Management and Temasek (Snapdeal).

In fact, IT and ITES business represented about $5.8 billion of the investments made, accounting for over 50 percent of deal value and volume during the year. The next most popular sector was healthcare and life sciences, which only represented 8 percent of total invested capital.

Other sizeable investments last year included a $323 million investment in L&T IDPL, the infrastructure development arm of engineering firm Larsen & Toubro, from Canada Pension Plan Investment Board (CPPIB), Caisse de depot et placement du Quebec and Omani sovereign wealth fund State General Reserve Fund.

Warburg Pincus also invested $200 million in retailer Kalyan Jewelers, while Temasek bought out ChrysCapital’s stake in Intas Pharmaceuticals for $144 million.