PE investments hit all-time high of $21 bln in 2017: Report

Private equity investments hit an all time high of USD 21 billion in 2017, recording a 54 per cent jump in value terms over last year, largely driven by big-ticket transactions, says a report. According to assurance, tax and advisory firm Grant Thornton, the year 2017 was a milestone year for PE investments as 735 transactions were announced worth USD 21 billion. The significant rise in PE deal values in 2017, despite a 24 per cent decline in number of deals over 2016, signals the revival of big-ticket investments and larger stake acquisitions. In 2017, there were six investments worth over USD 500 million, compared to only three in 2016.

"On the reforms and regulatory front, 2017 was an action-packed year with various initiatives aimed at driving economic stability. We believe these efforts will boost long-term investors' confidence and help in creating a platform for a new era of PE/VC activity in Indian corporate landscape, where they take larger roles, higher stakes and greater exposure in the long-run," said Harish HV, Partner India Leadership team, Grant Thornton India LLP. He further noted that the year 2018 is expected to surpass 2017 in terms of deal activity and overall investment sentiments.

When it comes to trends in sector-wise PE investment, e-commerce witnessed the largest year-on-year jump in 2017 with USD 6 billion worth of investments from 33 deals, compared to USD 1 billion from 31 deals in 2016. Apart from e-commerce, the other sectors which witnessed increased investments in 2017 were start-ups, banking and financial services, real estate, and IT/ITeS.

The report further noted that 2017 also saw a surge in IPO activity with 37 issues aggregating over USD 10.7 billion, recording almost three times the IPO values of 2016 and most issues witnessing significant over subscriptions. As per the report, many of the successful IPOs during the year provided a smooth exit for PE funds which is further expected to accelerate PE investments this year. The top four IPOs, all in the insurance sector, accounted for 55 per cent of overall IPO equity raised.

The report focused on PE/VC industry in India and was produced in association with Indian Private Equity and Venture Capital Association (IVCA).