New Delhi: Private equity investment dipped 48.8 percent in value terms to USD 2.3 billion through 319 deals in January-March this year over the corresponding quarter a year ago.
The first quarter of 2015 had seen PE inflows of USD 4.5 billion, according to the quarterly deals report by VCCEdge, the financial database and research platform of the VCCircle Network, owned by News Corp.
"The report confirms emerging trends mapped by VCCircle, which pointed to waning investor interest for ecommerce start-ups and shows a general consensus among private equity and venture capital investors that valuations of India's startups will need to drop as investments by limited partners will moderate," VCCircle Network CEO Nita Kapoor said.
The slowdown during the quarter was largely due to a significant fall of 80 percent in venture capital funding of deals in value terms.
Venture capital funding, witnessed a drastic decline with 88 deals being recorded against the 138 deals recorded during the first quarter of 2015. Deal value declined to USD 334 million in the January-March 2015, compared to USD 1.8 billion seen in the corresponding quarter last year.
Financials, industrials, consumer discretionary, information technology, and healthcare were the top five sectors to attract significant private equity capital during the quarter.
City-wise, India's financial capital, Mumbai, continues to be a hotbed for M&A while Bengaluru outpaced Mumbai for private equity activity in the country, followed by Delhi and Gurgaon, the report said.