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January 05, 2017

Manufacturing provides larger exits than IT in 2016; KKR enjoys bumper year

M&A deals account for 43.7% of exits, Venture Intelligence data shows

Private Equity exits in India declined by 18% to $7.86 Billion (across 215 deals) during the calendar year 2016 compared to an all-time high of $9.55 billion (across 270 deals) in 2015, according to data from Venture Intelligence, India’s longest serving data analytics firm focused on private company financials, transactions and valuations. The exit value includes $7.33 Billion of Complete Exits; the remainder being partial ones. These figures, which include exits from Venture Capital type investments and exclude exits from Real Estate investments, take the total realization by PE firms in the five year period starting in 2012 to about $33 billion (across 1,032 transactions). 


19 exits – i.e. 9% of the total deals – were over $100 million in value and accounted for 58% of the overall value harvested during the year. The largest exit during the year was the sale of KKR’s stake worth $1.05 billion in Alliance Tire Group to Japan’s Yokohama Rubber Co. The deal, which represents the single largest exit via the M&A route in India, enabled KKR to realize an about 2.8x return on its three year old investment. The next largest exit deal 2016 also belonged to KKR – in the form of its sale of its 38% stake in Gland Pharma for $550 million to Shanghai Fosun Pharmaceutical to register a 2.67x return. Including its exits from TVS Logistics Services and Dalmia Cement (Bharat), KKR harvested about $1.8 billion in returns from its India portfolio during 2016, the Venture Intelligence data showed.

The third largest exit during 2016 was the $420 million sale of the stake held by CX Partners and Capital Square Partners in Minacs BPO to US-based Synnex, fetching the investors a 1.74x return (in INR terms) in less than two years. (CX and Capital Square had acquired Minacs from the Aditya Birla Group in 2014.)

In the largest exit via the public markets, the microfinance focused Equitas Holdings pulled off a highly successful IPO that provided an exit route for its 14 PE/VC investors - 11 of whom sold shares worth $217 million as part of the IPO.

Top PE Exits by Size


Manufacturing overshadows IT

Manufacturing companies – led by the Alliance Tire Group deal – topped the exit charts during 2016, providing an all-time high harvest of $2.3 B - accounting for 29% of the value pie (12% by volume), the Venture Intelligence analysis showed. KKR’s exit from Alliance Tire Group was followed by Blackstone’s exit from International Tractors ($250 million) and Actis’ $136 million exit from auto components firm Endurance Technologies via the company’s October IPO.

IT & ITES industry came in second garnering $1.5 Billion worth of exits across 55 transactions in 2016. The stake sale by CX Partners and Capital Square Partners in Minacs BPO for $420 million to Synex was the top exit within IT.



The Healthcare & Life Sciences industry – the only major industry to show an YoY uptick in terms of both exit volume and value - came in third with $1.4 Billion worth of exits across 27 transactions led by the KKR’s $556 million exit from Gland Pharma and followed by Advent International’s selling of its majority holding in Care Hospitals for about $184 million (via a Secondary Sale to Abraaj Group). Warburg Pincus and Eight Road Ventures sold part of their stake worth $95 million in Laurus Labs as part of the company’s December IPO. Narayana Hrudayalaya‘s January IPO had provided an exit route for JP Morgan and PineBridge who sold shares worth $76.5 million (INR 511 Cr).

Led by the Equitas Holdings IPO, the BFSI industry came in fourth with $1.2 Billion worth of exits across 37 transactions. Investors including Kedaara Capital, Motilal Oswal PE, Warburg Pincus, IFC and ChrysCapital sold a 15% stake in AU Financiers for $112 million through a Secondary Sale (to meet a foreign holding related regulatory requirement), while the Ujjivan Financial Services IPO gave exit route for its investors including Unitus, India Financial Inclusion Fund and Lok Capital.

Strategic Sales Score

2016 saw PE investors selling shares via the public markets in 72 listed companies (across 106 deals). Strategic Acquisitions provided 63 exits; Secondary Sales, 37; and Buybacks, 8. Only exits via Strategic Sales, which accounted for 43.7% of the value harvested during 2016, displayed a rise over 2015. In fact, the share of exits via acquisitions has been climbing continuously for the last three years. 


Exits through the M&A route in the Online Services space included Quikr’s reported $120 million purchase of real estate listings focused Commonfloor (backed by Tiger Global, Accel India and Google Capital), the acquisition of payment gateway provider Citrus by rival PayUMoney for $60 million (providing an exit for Sequoia Capital India, Ascent Capital, Digital Garage and Beenos Partners) and Titan’s acquisition of Tiger Global’s stake in online jewelry firm CaratLane.com for $53.3 million.

2016 witnessed investors offloading shares worth over $2.4 billion via the public markets across 106 transactions. Out of the 16 PE Backed IPOs in 2016, 15 issues saw PE investors selling as part of the IPO. (2015 had witnessed 15 PE-Backed IPOs, of which PE investors sold as part of 11 issues.)


Among sale of shares in already listed companies, Lighthouse realized over 7x returns via sale of its shares in Agri-business firm Dhanuka Agritech, while SAIF Partners India realized over 7x returns when it part sold its shares in fruit drink manufacturing firm Manpasand Beverages. Creador Capital made a complete exit from Cholamandalam Investment and Finance Company with a 4.94x return.

Prominent among Secondary Sale deals was Goldman Sachs’ exit of its investment in metal castings maker Sigma Electric to Argand Capital Partners for a reported $200 million, fetching a 1.95x return. Advent International completely exited its investment in Care Hospitals for an estimated $184 million as part of Abraaj Group’s investment in the company. 

The above data are extracts from the Venture Intelligence 2016 PE Exits Report based on latest data from the Venture Intelligence PE Deals database. The full Report will be mailed to Venture Intelligence subscribers in the next few days.


Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.