PE, VC investment value dips 6% in January

At $1.2 billion and 43 deals, private equity and venture capital investments in January posted a slight decline in both value and volume terms, compared with the same month a year earlier. 

In value terms, PE and VC investments declined 6.3 per cent from January 2016 and 60 per cent from December 2016. December 2016 had witnessed the largest buyout deal in India, the $1.6 billion buyout of Reliance Infratel by Brookfield, according to EY.

PE and VC investments in January were valued at $1.2 billion in 43 deals against $1.28 billion in 46 deals in January 2016. Deal volume declined 6.5 per cent from January 2016 and 23 per cent from December 2016. This was mainly due fewer growth/expansion funding deals and high-value deals, with more than half of the deals being of less than $10 million in value. 

Early-stage VC deals, however, performed well at 27 transactions during the month. A single deal, CPPIB’s acquisition of a 48 per cent stake in Global Logic for $720 million from Apax, accounted for 60 per cent of the deal value in January.

Except for technology, all other sectors recorded a decline in both value and volume.

Real estate and financial services, which were major contributors almost every month last year, recorded $22 million (one deal) and $23 million (four deals), respectively. Food and agriculture had $78 million in seven deals, the highest monthly performance in over two years. Education saw six deals during the month.

Mayank Rastogi, partner and leader for PE, EY, said, “January investment numbers were influenced greatly by the large deal involving Global Logic, which was also one of the largest exits in recent times. The deal volumes were sustained on the back of steady early stage VC activity.”

 


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