Overall PE investments plunge to lowest levels since 2009
Private Equity firms invested $7.5 billion (over 384 deals) in India during the 12 months ending December 2013, according to analysis by Venture Intelligence, a research service focused on private company financials, transactions and valuations. The 2013 PE investment numbers, down over 18.5% compared to the $9.2 billion (across 484 deals) invested in 2012, represent the lowest levels witnessed in the last four years in both value and volume terms.
Led by KKR’s $460 million investment in Alliance Tire Group, the four largest investments during 2013 involved global PE investors buying majority stakes from existing investors. The next three largest transactions were all in the IT Outsourcing sector: the $443 million buyout of publicly listed Hexaware Technologies by Baring Asia; the $420 million buyout of GlobalLogic by Apax Partners; and the $270 million buyout of CSS Group by Partners Group. The 18 investments of over $100 million in value during 2013, accounted for as much as 47% of the value pie during the year.
By Industry
With 154 investments worth about $2.3 billion, Information Technology and IT-Enabled Services (IT & ITES) companies topped in terms of both investment value and volume during 2013. The mega buyout transactions in the mature IT Services sector were followed by leaders in the sunrise E-Commerce sector - Flipkart and Snapdeal – that received reported commitments of about $500 million between them during the year. 2013 also witnessed PE firms betting serious dollars on Indian IT products firms going global. The trend was exemplified by well known US-based PE firm Silver Lake Partners choosing to lead a $40 million round in commodities trading software firm Eka Software for its inaugural investment in India. In other significant sized – and departure from the normal - IT industry bets, Peepul Capital, which typically focuses on control transactions, acquired a minority stake in online advertising firm Komli Media (leading a $30 million round with participating from the company’s existing VC backers), while Sequoia Capital India invested $37 million in online restaurants reviews service Zomato Media by joining hands with the company’s existing strategic investor and majority owner, the publicly listed online classifieds firm Info Edge.
The Healthcare & Life Sciences industry was the next largest destination for PE investments in 2013 attracting $1.2 billion across 57 transactions. Here too, the top three transactions involved secondary purchases from existing investors – the $200 million investment in Gland Pharma (by KKR); the $161 million investment in Dr.Naresh Trehan promoted hospital Medicity (by Carlyle); and the $113 million investment in Emcure Pharmaceuticals (by Bain Capital). Led by KKR’s Alliance Tire buyout, Manufacturing companies attracted about $1.1 billion from PE investors during 2013 across 30 transactions. Baring Asia's INR 1,400 crore (about $233 million) investment in Lafarge India, the Indian subsidiary of French cement giant Lafarge, was the second largest transaction, followed by buyouts of two more auto components firms: Agile Electric (by Blackstone) and Sansera Engineering (by Citi). The BFSI industry came in next attracting $727 million across 44 transactions, led by banking aspirant JM Financial Products; the private sector Ratnakar Bank; microfinance companies Janalakshmi and Equitas; and non-banking lenders like Cholamandalam, Hinduja Leyland Finance and Repco Home Finance.
By Stage
Buyout deals which accounted for less than 5% of the PE investments in volume terms during 2013, accounted for as much as 27% of the value pie. Late Stage deals accounted for 20% of the investments in volume terms and about 27% in value terms during 2013, the Venture Intelligence research showed. Venture Capital investments accounted for 53% in volume terms and 11% in value terms. Acquisition of minority stakes in listed companies accounted for 14% in volume terms and 10% in value terms.
By Region
Companies based in South India and West India accounted for 36% of the PE investments each (in value terms) during 2013. While the amount (about $2.7 billion) was spread across 148 investments in South India-based companies, it got spread across 127 transactions among West India-based companies. Companies in North India attracted investments worth $1.8 billion (24% of the value pie) across 84 deals.
Venture Intelligence is the leading provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to view our products list including the Free Deal Digest Weekly: India's First & Most Exhaustive Transactions Newsletter.
Private Equity firms invested $7.5 billion (over 384 deals) in India during the 12 months ending December 2013, according to analysis by Venture Intelligence, a research service focused on private company financials, transactions and valuations. The 2013 PE investment numbers, down over 18.5% compared to the $9.2 billion (across 484 deals) invested in 2012, represent the lowest levels witnessed in the last four years in both value and volume terms.
Led by KKR’s $460 million investment in Alliance Tire Group, the four largest investments during 2013 involved global PE investors buying majority stakes from existing investors. The next three largest transactions were all in the IT Outsourcing sector: the $443 million buyout of publicly listed Hexaware Technologies by Baring Asia; the $420 million buyout of GlobalLogic by Apax Partners; and the $270 million buyout of CSS Group by Partners Group. The 18 investments of over $100 million in value during 2013, accounted for as much as 47% of the value pie during the year.
By Industry
With 154 investments worth about $2.3 billion, Information Technology and IT-Enabled Services (IT & ITES) companies topped in terms of both investment value and volume during 2013. The mega buyout transactions in the mature IT Services sector were followed by leaders in the sunrise E-Commerce sector - Flipkart and Snapdeal – that received reported commitments of about $500 million between them during the year. 2013 also witnessed PE firms betting serious dollars on Indian IT products firms going global. The trend was exemplified by well known US-based PE firm Silver Lake Partners choosing to lead a $40 million round in commodities trading software firm Eka Software for its inaugural investment in India. In other significant sized – and departure from the normal - IT industry bets, Peepul Capital, which typically focuses on control transactions, acquired a minority stake in online advertising firm Komli Media (leading a $30 million round with participating from the company’s existing VC backers), while Sequoia Capital India invested $37 million in online restaurants reviews service Zomato Media by joining hands with the company’s existing strategic investor and majority owner, the publicly listed online classifieds firm Info Edge.
The Healthcare & Life Sciences industry was the next largest destination for PE investments in 2013 attracting $1.2 billion across 57 transactions. Here too, the top three transactions involved secondary purchases from existing investors – the $200 million investment in Gland Pharma (by KKR); the $161 million investment in Dr.Naresh Trehan promoted hospital Medicity (by Carlyle); and the $113 million investment in Emcure Pharmaceuticals (by Bain Capital). Led by KKR’s Alliance Tire buyout, Manufacturing companies attracted about $1.1 billion from PE investors during 2013 across 30 transactions. Baring Asia's INR 1,400 crore (about $233 million) investment in Lafarge India, the Indian subsidiary of French cement giant Lafarge, was the second largest transaction, followed by buyouts of two more auto components firms: Agile Electric (by Blackstone) and Sansera Engineering (by Citi). The BFSI industry came in next attracting $727 million across 44 transactions, led by banking aspirant JM Financial Products; the private sector Ratnakar Bank; microfinance companies Janalakshmi and Equitas; and non-banking lenders like Cholamandalam, Hinduja Leyland Finance and Repco Home Finance.
By Stage
Buyout deals which accounted for less than 5% of the PE investments in volume terms during 2013, accounted for as much as 27% of the value pie. Late Stage deals accounted for 20% of the investments in volume terms and about 27% in value terms during 2013, the Venture Intelligence research showed. Venture Capital investments accounted for 53% in volume terms and 11% in value terms. Acquisition of minority stakes in listed companies accounted for 14% in volume terms and 10% in value terms.
By Region
Companies based in South India and West India accounted for 36% of the PE investments each (in value terms) during 2013. While the amount (about $2.7 billion) was spread across 148 investments in South India-based companies, it got spread across 127 transactions among West India-based companies. Companies in North India attracted investments worth $1.8 billion (24% of the value pie) across 84 deals.
Venture Intelligence is the leading provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to view our products list including the Free Deal Digest Weekly: India's First & Most Exhaustive Transactions Newsletter.