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 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 https://www.ventureintelligence.com