2015 Provided Window Of Opportunity For PE Investors

Private equity investors seem to be back in action this year after going slow for a few years following the global economic meltdown.

After adopting a wait-and-watch policy and accumulating ‘dry powder’ or capital that they failed to invest due to lack of investible opportunities for almost three years in a row ending in 2013 or for that matter early 2014, this year seems to have opened a window of opportunity for fund managers.

The number of private equity/venture capital deals grew threefold last month from the corresponding month two years ago, as per data collated by an assurance, tax and advisory firm Grant Thornton. In November 2015, as many as 91 private equity/venture capital transactions were sealed while the number deals stood at a meagre 39 in November 2013.

With a complete makeover of digital over the last few years, a lot of new age sectors such as ecommerce and mobile are increasingly evincing investor interest. “It is e-commerce deals that are driving PE investments,” said Prashant Mehra. partner at Grant Thornton India LLP. Some of the private equity deals that took place last month include SAIF Partners’ investment in Talent Unlimited Online Services and IDG Ventures’ investment in Alpinismo Online Ventures in the ecommerce space.

This coupled with investments in traditional sectors like healthcare and IT have spruced up overall investment activity. In terms of value, private equity investors pumped in $1,439 million in November 2015, a jump of 82 per cent from $790 million in November 2013.

“With inflation in control and GDP growth being revised to now end higher than anticipated, all the necessary ingredients seem to be in place for growth in deal activity as well, added Mehra.

Now, it is to be seen if the recent FDI norms and the much awaited GST will be a game changer going forward and will further accelerate the deal activity from inbound investment, domestic M&A and private equity transactions.