Private Equity (PE) investments in India rose to their highest ever figure of $33.1 billion in 2018, according to data from Venture Intelligence, a research service focused on private company financials.

According to the research firm, PE investments had already surpassed the previous high - $24.3 Billion across 734 deals in 2017 – in the first nine months of 2018, big ticket investments in Swiggy and Byju's towards the end of the year catapulted the year’s investment tally by 36% year-on-year.

The year 2018 witnessed 81 PE investments worth $100 million or more (accounting for 77% of the total investment value during the period), compared to 47 such transactions in 2017. Of these, 40 were larger than $200 million each (by themselves accounting for 60% of the total value) - compared to 30 such investments in the year ago period, the note from Venture Intelligence said.

Led by the $1 Billion investments in Swiggy from South Africa-based Naspers and others and Oyo (led by SoftBank, IT & ITeS companies accounted for 32% of the PE investment pie in 2018 (attracting $10.6 Billion across 383 deals). Food delivery app maker Swiggy had started the year with a $100 million investment led by Naspers, followed it up with mid-year $210 million raise (co-led by Naspers and DST Global) and polished the year off with a $1 Billion investment (led by Naspers and Tencent). Hotel chain Oyo raised $800 million (with an additional commitment for $200 million) led by SoftBank Vision Fund. Paytm raised $445 million from SoftBank and Alibaba for its E-commerce business, Paytm Mall and $356 million from Berkshire Hathaway at the parent company (One 97 Communications) level.

Other large ticket IT & ITeS investments in 2018 included the $300 million attracted by online payment gateway service BillDesk from Temasek and others; the $236 million raise by online insurance broker PolicyBazaar (led by SoftBank) and the $410 million (across two rounds) raised by Swiggy competitor Zomato. Other notable tech companies that attracted rounds of $100 million or more during the year included payments enabler Pine Labs, event ticketing service Bookmyshow, regional language social app ShareChat, music service and fantasy gaming startup Dream11, said Venture Intelligence.

Financials Services companies, led by the HDFC and Star Health Insurance, attracted 72 investments worth $5.9 Billion and included 17 deals of $100 million or more.

“The mid-year Walmart-Flipkart deal clearly re-energized international investors’ appetite for mega bets in Indian Internet & Mobile companies. This has helped offset the slowdown in investments in sectors like Financial Services, Manufacturing and Infrastructure towards the year end triggered by nervousness in the public markets and the IL&FS scare,” said Arun Natarajan, Founder of Venture Intelligence. “Whether the PE investment tally of 2019 can outdo the highs of 2018 seems set to hinge substantially on Global Economic trends in the New Year and the outcome of the upcoming National Elections,” he added.

According to an another report by Venture Intelligence in October, Japanese multinational telecommunications and Internet corporation, SoftBank has alone contributed over USD 4 billion of the investment value or 24% of the total PE investments in the first nine months of year-2018.

In September quarter of last year, the private equity & venture capital (PE/VC) investments in Indian startup ecosystem reached a whopping $8.7 billion, according to a report by research company Ernst and Young (EY). The figure at that time was significantly higher than what was recorded for the same period of year 2016.

In July-September 2017 quarter, Indian startups witnessed a total of nine $200-million-plus deals, with SoftBank’s $2.5 billion investment in Indian e-commerce giant Flipkart being the largest PE investment ever recorded in the Indian subcontinent.

Source - Economic Times

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