A report by EY said that the private equity and venture capital investments in India have reached a whopping $7.9 billion in the first three months of 2018 mainly driven by large value transactions. The investment activity in January-March 2018 surpassed the previous high of $4.6 billion in Q1 of 2008, rising by 72%. In comparison to Q3 of 2017 that recorded investments to the tune of $8.7 billion, this was the second best quarter.
The momentum continued buoyed by investments in infrastructure and real estate sectors. Also, the financial services domain gave a lift with $2.9 billion received from across 31 transactions. As per the PTI report, EY said, "This uptick in Q1 2018 investment levels was primarily aided by $3.1 billion worth of investments made in the infrastructure and real estate sectors, which accounted for 39 per cent of all investments in Q1 2018, compared to just $305 million invested in these asset classes in Q1 2017 and $1.7 billion in Q4 2017. This was also the highest ever quarterly investment by the PE/VC industry into infrastructure and real estate".
In Q1 2018, 13 deals valued over $100 million were made that aggregated to $5.7 billion and account for 72% of the total deals made during the period. During the period, the largest transaction involved investment of $1.7 billion into HDFC Limited by GIC, KKR and others. It was the largest private investment in public equity since 2007 when Temasek invested about $2 billion in Bharti Airtel.
The report also highlighted a decline in the number of exits to $1.8 billion as against the corresponding quarter a year ago. The report said, "Exits in Q1 2018 were marred by volatility in the global capital markets which were rattled by fears of a trade war between US and China. Q1 2018 recorded $1.8 billion in exits, 10 per cent lower than Q1 2017 and 51 per cent lower compared to Q4 2017".
The report says that the Q1 of 2018 has been the healthiest in respect of PE and VC investment in recent years and the trend is likely to remain strong across asset classes this year. Fund raising activity has been also on a strong footing in Q1 2018 at $1.3 billion at par with the amount raised in the corresponding quarter last year. On a month-on-month basis, March netted $3 billion in investments, higher by 14 per cent in comparison to $2.6 billion recorded in March 2017.
With PTI Inputs