Private equity (PE) and venture capital (VC) exits worth $1 billion were recorded in April 2017, up 270% from April 2016, data from consultancy firm EY showed. A total of 31 deals were recorded during the month, up 117% from last April.
The number of exits in April were the highest in the past five years. Exits in 2017 now total $3 billion, which is 46% of the aggregate value recorded in 2016.
Open market exits with $653 million across 15 deals emerged as the preferred mode, accounting for 65% of exits by value and 58% by volume.
Some of the major exits included KKR selling 8.43% stake in Dalmia Bharat Ltd for $236 million; Goldman Sachs selling 4.86% holding in Max Financial Services for $123 million and ChrysCapital’s 3% stake sale in Intas Pharmaceuticals for $106 million.
Meanwhile, PE/VC investments during the month crossed the $2 billion mark for the second consecutive month. However, there was a decline of 8% and 24% in value terms compared to April 2016 and March 2017, respectively. The number of deals increased by 29% over April 2016.
There was, however, a significant increase in large deals (more than $50 million) across key sectors including telecom, consumer technology, financial services and logistics. Besides, the average transaction size rose 69% to $32 million from a year earlier, while deals below $10 million comprised 66% of total activity in the quarter.
The month saw seven deals greater than $100 million, accounting for almost 59% of aggregate deal value ($906 million) in April 2017 compared to three ($ 885 million) in April 2016.
“Despite a significant number of large deals (over $100 million) the aggregate deal value declined in April 2017 on account of a fewer number of mid-sized deals in the range of $20 million-$50 million,” the statement said.
In the mid-size segment, there were two deals worth $61 million in April 2017 compared to 11 deals worth $387 million in April 2016.
“April was another strong month both for PE investments and exits. Buyouts have clearly been the standout highlight of the year and we see buyout activity only get stronger with time,” the statement said.
“The PE model is slowly but surely moving towards value creation and it bodes well for India at large. This helps creating stronger, more competitive businesses leading to a number of collateral benefits such as capacity building, skill development, greater job creation, and improved tax revenues etc,” the statement added.
“India has been a relatively longer gestation market and the pension fund capital and buyout capital which tends to address that need is leading to improved deal velocity and investment numbers,” the statement further said.
Also, the buyout scenario has been progressively improving in India over the past five years. In April, buyouts accounted for 45% of the total deal value with $906 million across six deals.
The top buyout deals include Capital Square Partners’ $275 million buyout of Aegis Ltd from Essar; Macquarie’s $250 million buyout of Hindustan Powerprojects; True North and co-investors’ $200 million investment in Religare Health Insurance Company; Kedaara Capital and Ontario Teachers Pension Plan investment of $100 million in microfinance company Spandana Sphoorty Financial Ltd.
There was also a decline in debt deals with just $11 million across four deals compared with $297 million across eight deals in April 2016.
From a sector perspective, financial services led deal activity in April with $316 million worth of investments across nine deals, followed by technology with $306 million across 15 deals and real estate that saw CPPIB investing $111 million in Island Star Mall Developers (Phoenix group) for a mix use project.
The e-commerce space witnessed a large deal after a long time with Softbank investing $250 million in OYO rooms.