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PEs offload $1.79 bn stakes in April-June qrtr: PWC

In the second quarter of 2012, there were 26 exits worth USD 321 million.

New Delhi: Private equity players offloaded stakes worth USD 1.79 billion in the second quarter of this calendar year, registering a five-fold growth from the year-ago period.

According to a research note from PwC, in the April-June period, PE exits were valued at USD 1,782 million through 30 deals, a more than five-fold growth in value and an increase of 15 percent in terms of volume over the corresponding period last year.

In the second quarter of 2012, there were 26 exits worth USD 321 million.

PE firms generate returns and realise investments in a company through 'exits' using options like an initial public offering, a trade sale, selling to another private equity firm or a company buy-back.

On quarter-on-quarter basis, the exit activity in this quarter has doubled. In the April-June period, there were PE exits worth USD 1,782 million from 30 deals as compared to USD 884 million USD from 29 deals in Q1 2013.

The majority of the exits in this quarter came from the IT and ITeS and manufacturing sectors which together contributed around 57 percent of the total exit value and 53 percent of the total volume, the PwC report said.

With 10 deals worth USD 539 million, the IT and ITeS sector topped the list of PE exits in terms of value, followed by the manufacturing sector, which witnessed an exit of USD 472 million from six deals.

The energy, education, engineering and construction sectors also witnessed a spurt in the exit value in the April-June quarter, PwC said.

However, the BFSI sector witnessed an 18 percent drop in the exit value along with a 50 percent drop in the volume, from USD 391 million (six deals) in Q1 2013 to USD 322 million (three deals) in Q2 2013.

The preferred modes of exits in Q2 2013 were through public market sale (nine exits) and strategic sale (seven exits). The other modes were secondary sale (six exits), buyback (six exits) and two exits through IPO.

In Q2 2013, secondary sale fetched the highest exit value, worth USD 798 million (about 45 percent of the total exit value), PwC said.


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