PE, VC deals in India drop 26% in a month

Despite the overall decline debt deals continued apace, contributing more than a third of the overall deal value, from October to November 2016.

Private equity and venture capital deals in India declined to $908 million in November 2016, compared to $1.2 billion a month before, according to a report from Ernst & Young.

The firm said in the report that the drop in activity was mainly due to the 67 percent fall in the number of expansion/growth deals in November compared to the previous month.

“There has been a slowdown in the growth capital activity in the last few months and the lack of deal closures in November 2016 further compounded the same. This has been, somewhat, compensated by the structured deals/refinancing activity largely in the real estate sector and the large buyout deals,” said Mayank Rastogi, partner and leader for private equity at EY.

Growth deals accounted for just 15 percent of the overall deal value for the month amounting to $137 million, start-up/early stage deals reached $222 million, while buyouts accounted for $95 million.

Notable deals in the early stage and growth sectors included Mumbai-based Multiples Alternate Asset Management’s $110 million investment in textile company Arvind Fashion and Warburg Pincus’s $75 million minority stake in logistics provider Rivigo Services.

Propping up India’s private equity market were structured/debt deals. In this space, five deals over $326 million were recorded, of which more than 75 percent occurred in the real estate sector.

Among the top three structured/debt deals include KKR and Altico Capital’s $67 million investment in SARE Homes’ Gurgaon project, Piramal Fund Management’s $112 million investment in Adarsh Developers and another $75 million investment in renewable energy company ACME Cleantech Solutions.

In terms of investment sector real estate, hospitality and construction companies (RHC) made up the highest deal value in November at $197 million, followed by infrastructure at $173 million, and financial products at $166 million.

Apart from the slowdown in investments, exits also decreased in November, with only $63 million recorded across 15 deals, a 92 percent decline in value terms compared with October 2016.