Q3’18 is the Biggest Quarter Ever at $9.2 B; up 60% YoY
Mega Deals Rule the Roost in Q3 with 12 investments worth over $200-M each, accounting for 65% of Investment Pie
Mega sized Private Equity investments in the July-September quarter have catapulted 2018 into the biggest year for PE investments in India, with the nine month total already matching the previous 12 month high recorded in 2017. According to data from Venture Intelligence (http://www.ventureintelligence.com), a research service focused on private company financials, transactions and their valuations, the total PE investments in the first nine months of 2018 touched $23.7 Billion (across 525 deals) – up 29% compared to the first nine months of 2017 (across 527 transactions). (Calendar 2017 was the biggest ever year for PE investments in India, recording $23.7 Billion across 704 deals).
Private Equity firms invested a record $9.2 Billion (across 154 deals) during the quarter ended September 2018 – up 60% compared to the $5.8 Billion (across 146 transactions) in the same period last year, Venture Intelligence data shows. The investment amount in Q3’18 was 11% higher than the immediate previous quarter (which had recorded the previous highest quarterly investments at $8.3 Billion across 191 transactions). Note: These figures include Venture Capital investments, but exclude PE investments in Real Estate.
The latest quarter witnessed 22 PE investments worth $100 million or more (accounting for 79% of the total investment value during the period) compared to 13 such transactions in Q3’17. Of these, 12 were larger than $200 million each (by themselves accounting for 65% of the total value) - compared to just four such investments in the year ago period, the Venture Intelligence data shows.
The biggest PE investment reported during Q3’18 was the $1.2 Billion equity investment by ADIA and TPG - for a combined stake of 22% - in UPL Limited (formerly United Phosphorus Limited). The funding will be used to finance the Mumbai-based, publicly listed UPL’s $4.2 Billion acquisition of US-based Arysta LifeScience Inc. This was followed by two $1 Billion investments: in hotel chain Oyo (led by SoftBank Vision Fund) and in Star Health Insurance (by WestBridge Capital, Madison India, Rare Enterprises and other investors).
IT & ITeS companies accounted for 34% of the PE investment pie ($3.2 Billion across 80 deals), led by the Oyo - SoftBank deal and Berkshire Hathaway’s reported $360 million investment mobile wallet firm Paytm. Other large ticket IT & ITeS investments reported during the period include Temasek’s $225 million investment in Ola (via a secondary transaction) and a similar sized investment in B2B E-Commerce marketplace Udaan (by DST Global and Lightspeed Partners). The quarter witnessed a total of nine investments of $100 million or above in IT & ITeS companies, including in companies like Bookmyshow, ShareChat and Freshworks.
“International investor interest in Indian Internet & Mobile companies has shot up dramatically post the Walmart-Flipkart deal,” remarked Arun Natarajan, Founder of Venture Intelligence. “At the same time, it is gratifying that investments in other industries - including in Manufacturing, Energy and Engineering companies – is also quite strong. This lends confidence that 2018 will set a significantly new high for PE investments in the country, even if the nervousness in the public markets and global events begin to affect private markets in Q4,” he added.