Pause in Mega E-Commerce deals sends QoQ value down 36%
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Private Equity firms invested about $2,646
million across 124 deals during the quarter ended March 2015, according to early
data from Venture Intelligence (http://www.ventureintelligence.com), a research
service focused on private company financials, transactions and their valuations.
The investment amount was 20% higher than that invested in the same period last
year ($2,212 million across 132 transactions), but 36% lower than the immediate
previous quarter (which, on the back of blockbuster deals in E-Commerce
companies had witnessed $4,120 million being invested across 112 transactions).
Note: All figures in this note are exclusive of PE investments in Real Estate.
There were six PE investments worth $100
million or more during Q1’15 compared to four such transactions in the same
period last year and eight during the immediate previous quarter, the Venture
Intelligence analysis showed. The largest investment during Q1’15 was IFC’s
$260 million commitment to microfinancier-turned-bank license holder Bandhan Financial Services. Another
microfinance firm Ujjivan Financial
Services attracted a $100 million (INR 600 crore) investment from a clutch
of investors including CDC Group, IFC and CX Partners. Two large hospital
operators – Manipal Health Enterprises
and Medanta Medicity – attracted
$100 million plus rounds. While Manipal attracted INR 900 crore ($150 million)
from TPG Capital, Medanta attracted INR 700 crore (about $114 million) from
Temasek (via a secondary purchase from Punj Lloyd). The largest E-Commerce deal
reported in Q1’15 was the $100 million fourth round raised by ShopClues.com led by Tiger Global (a
key investor in rival Flipkart).
The Power sector too witnessed a return
of interest with IDFC Alternatives committing INR 500 crore (about $81 million)
to an SPV of Diligent Power
executing a 1,200-Mw thermal power project in Chhattisgarh and Actis announcing
a SPV of its own – Ostro Energy – to
focus on renewable power projects. Transactions like Carlyle’s buyout of
financial services firm Destimoney
(from erstwhile majority owner New Silk Route) as well as Ujjivan (in which
half of the investment went to exiting investors including Sequoia Capital
India) marked a return of significant sized secondary transactions between
Private Equity firms.
While IT & ITES companies accounted
for 32% of the value pie (attracting $836 million across 71 deals) during
Q1’15, BFSI (Banking, Financial Services and Insurance) companies followed
closely at 31% (attracting $816 million across 12 deals). They were followed by
Healthcare & Lifesciences companies ($392 million across nine transactions)
and Energy companies ($207 million across 6 transactions).
The Venture Capital
segment (defined as investments of up to $20 million in companies that have
been active for less than 10 years) accounted for 68 of the PE transactions or 55%
of volume pie during Q1’15. Late Stage companies (including mature companies
like Bandhan, Manipal Health, Medanta and Ujjivan) attracted 27 investments and
accounted for 45% of the pie in terms of value during the period. Listed
company investments (“PIPE” deals) accounted for 8% of the pie in value terms (and
6% in volume terms). Venture Capital investments of Q1’15 were dominated by
follow-on rounds in companies like online video content firm Culture Machine ($18 million round led
by Tiger Global), food ordering app Tinyowl
($16.25 million led by Matrix Partners India) and QSR chain Faasos ($16 million round led by
Lightbox). Listed companies that attracted PE investments too were topped by
BFSI companies like Magma Fincorp
(INR 500 crore or about $80 million from India Value Fund, Leapfrog and KKR)
and M&M Financial (about $42
million from Temasek).