An Overall View of Private Equity in India

June 2, 2018

The first quarter of 2018 is already gone, and it is time to take a step back and look at the private equity space in India to see how the numbers panned out in these difficult times.

Let us look at some of the highlights in this quarter

  • A total of 323 mergers and acquisitions and private equity deals happened in the first quarter of 2018. These deals were valued at an average of about $70 million per deal.
  • But the total deal size of $22.5 billion for these 323 deals was down by more than 20% compared to the same quarter of 2017.
  • We were up against a huge deal that had taken place in the same quarter last year, the merger of Idea into Vodafone, valued at $23 million. If we ignore this huge deal, then the other deals of this quarter were 3.3 times the value of the deals last year.
  • The increase in deal size is borne out by the fact that there were as many as 11 deals of size between $50 million and $100 million, and eight deals that breached the $100 million mark.
  • Another interesting fact is that the action started picking up all through the quarter. February saw as many as ten deals bigger than $50 million, while March recorded almost 1.5 times the value of deals as compared to March of 2017, with 5 such mega deals of over $50 million.
  • Real estate and startups were the two standout sectors in this quarter.
  • As many as 1403 private equity deals got announced in real estate in these three months, which means an average awesome of more than 15 deals every day across the world!!
  • This number was the highest recorded in a single first quarter for the last five years, in terms of both deal volume (number) as well as aggregate value.
  • Startups too dominated the private equity space in India, just as they have been doing for almost five years now.
  • The two eye-popping deals in this quarter were the Series E funding of $300 raised by Big Basket and the $100 million Series F funding raised by Swiggy.

All in all, it was a satisfying quarter for Indian private equity. This seems to be a happy beginning for the year, and more such deals can be expected through the year.Investment Banking Banner

Let us look at what the story was for global and markets

  1. 2017 had a lot of difficult political and regulatory environment, but still, big-ticket private equity deals continued to be announced in the first quarter of 2018.
  2. Witness the takeover of Qualcomm by Broadcom at a reported $100 billion (some reports suggest it may be more), the takeover of insurance powerhouse Aetna by CVS Health for close to $70 billion.
  3. In the entertainment space, the biggest splash was made by the takeover of 20th Century Fox by Disney.
  4. Another interesting development was the use of M&A to diversify into a new area of business, like the proposed merger of telecom giant AT&T with the entertainment behemoth Time Warner. Our mouths water at the prospect of what Time Warner and AT&T could do together using their respective strengths.
  5. This trend of consolidation through acquisitions or mergers is expected to continue through 2018 on account of the fiercely competitive landscape which brings to mind the Darwinian theory of survival of only the fittest.

Overall, the Indian private equity reflected the bullish big ticket activity in the World markets including the Asia Pacific, and the year 2018 seems set to be a memorable year for PE as well and M&A.

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