Private equity, venture capital investments jump 50% y-o-y to $3.1 bn in October, says EY report

Mumbai: Six large deals of over $100 million each resulted in a 50 percent year-on-year jump in the total venture investments in the country in October to $3.1 billion, a report said Monday. The total investments by private equity (PE) and venture capital (VC) funds in 2018 have gone up to $25.2 billion, only $1 billion short of last year’s record inflows, consultancy firm EY said in its monthly report. October saw Warburg, Temasek, Softbank and a few other investors pump in $1.3 billion in the Africa business of Bharti Airtel for a 28.4 percent stake, Xander’s $350 million buyout of Phoenix’s Hyderabad office project and Advent’s $326 million buyout of Manjushree Technopack, it said. “While PE/VC deal activity in July-September was weak, the strong start to the fourth quarter is encouraging. Despite the underperformance in open market exits, PE/VC exit activity continues to remain robust with support from strategic and secondary deals,” said Vivek Soni, national leader for private equity services, EY. He, however, was quick to add that investors are less bullish as compared to the beginning of the year on factors like upcoming state elections, the 2019 general elections, the evolving bad-loan situation and the developing situation around select non-banking financial companies (NBFCs). [caption id=“attachment_4495585” align=“alignleft” width=“380”]  Representational image. Reuters.[/caption] Buyout deals continue to outperform with $806 million recorded across four deals, compared with $54 million in one deal in October 2017 and $500 million across three deals in September 2018, the firm said. The mainstay of investing continues to be growth, it said, pointing out that it accounted for 86 percent of all investments in October with PE/VC investments at $1.8 billion in 13 deals. Telecom was the favourite among sectors courtesy the Airtel deal, followed by real estate ($364 million in two deals) and financial services ($334 million in eight deals), it said. Blackstone’s $1-billion exit from business process outsourcing player Intelenet resulted in the overall exits doubling to $1.4 billion in October over the same period last year. Funds raised $641 million for investing in India, compared with $31 million in the same period last year, it said, attributing the sharp rise to $313 million raised by Motilal Oswal PE.