Private equity - making a comeback in 2014!

PE investments in India increased to 47.30 per cent during 2014, after dropping to a four year low in 2013. This was led by big deals in online services companies, especially E-Commerce firms.

After plunging to a four year low in 2013, Private Equity investments in India bounced back by 47.3 % during 2014 to touch US $10.9 billion (across 436 deals) – the second highest figure ever, behind only the US $14.5 billion (across 529 deals) invested in 2007, according to data from Venture Intelligence, a research service focused on private company financials, transactions and valuations.

The surge was led by mega deals in Online Services companies – especially E-Commerce firms – that accounted for almost US $4.1 billion (across 106 deals) or 37.6 % of the investment pie during the year. (Venture Intelligence’s figures on PE investments do not include investments in Real Estate)

The top two home grown e-tailers, Flipkart and Snapdeal, collected almost US $3 billion between them in 2014. Flipkart, via its Singapore-based holding company, rounded up $1.91 billion across three rounds – starting with a US $210 million one in May, jumping to $1 billion in July and topping up with a US $700 million round in December. Japan’s SoftBank Corp led a US $637 million round for Snapdeal to become the biggest investor in the company. In May 2014, Snapdeal had attracted US $100 million including from new investors PremjiInvest, Singapore’s Temasek, the typically public markets focused Blackrock, and hedge funds Tybourne and Myriad. This had followed a US $134 million raise in February from the company’s existing Venture Capital investors and strategic investor eBay.

Softbank also led a US $210 million round in for online taxi aggregator Olacabs with participation from the company’s first investor – and key Flipkart backer – Tiger Global, new investor Steadview Capital and existing investor, Matrix Partners India.

In contrast, 2013 had witnessed PE investors committing a total of US $7.4 billion (across 433 deals) with only Flipkart featuring among the top 10 investments. Including Flipkart’s two rounds – of $200 million and $160 million – Online Services companies had raised $786 million (across 86 deals) or less than 11% of the PE investment pie in 2013.

Top Investments in 2014*
Company Sector Amount

(US$M)

Investors Date
Flipkart E-Commerce 1000 Morgan Stanley, GIC, Tiger Global, Accel India, Iconiq Capital, DST Global, Others Jul-14
Flipkart E-Commerce 700 Tiger Global, Iconiq Capital, DST Global, Steadview, Others Dec-14
Snapdeal.com E-Commerce 637 SoftBank Corp, Temasek, PremjiInvest, Others Oct-14
L&T-IDPL Infrastructure Services 323 CDPQ, CPPIB, SGRF Feb-14
Minacs BPO BPO 260  CX Partners, Others Jan-14

TOP INVESTMENTS BY INDUSTRY 

With 224 investments worth about $5.8 billion, Information Technology and IT-Enabled Services (IT & ITES) companies topped in terms of both investment value during 2014. Led by the Intas Pharma and Laurus Labs investments, the Healthcare & Life Sciences industry was the next largest destination for PE investments in 2014 attracting $874 million across 44 transactions. Pharmaceuticals firms accounted for six out of the top investments in HLS during 2014. The BFSI industry came in next attracting $752 million across 32 transactions with the $100 million investment led by TPG in microfinance company Janalakshmi as the top investment, followed by Apax Partners’ $83.2 million in listed non-banking lender Cholamandalam.

TOP INVESTMENTS BY STAGE 

Late Stage deals accounted for 50% of the investments in value terms and about 20% in volume terms. Venture Capital investments accounted for 56% in volume terms and 10% in value terms. Acquisition of minority stakes in listed companies (“PIPEs”) accounted for 8% in volume terms and 7% in value terms.


 

Source: Venture Intelligence, a division of Chennai, India-based TSJ Media Pvt. Ltd., is the leading provider of data and analysis on Private Company Financials, Transactions and their Valuations in India. For more information, please visit http://www.ventureintelligence.com

IPO Private Equity Venture Intelligence

Poornima Kavlekar has been associated with The Smart CEO since the time of launch and is the Consulting Editor of the magazine. She has been writing for almost 20 years on a cross section of topics including stocks and personal finance and now, on entrepreneurship and growth enterprises. She is a trained Yoga Teacher, an avid endurance Cyclist and a Veena player.