PE/VC exits at record high in August at $1.9 billion ; may touch $10 billion

Mumbai: Inflows and outflows from private equity and venture capital investors have hit an all-time high in August at USD 5.4 billion and USD1.9 billion, respectively, said a report.

So far in 2017, overall PE/VC exits are at an all-time high of USD7.1 billion, surpassing the previous record of USD 6.7 billion for the full year of 2016, said the report by EY.

PE/VC investments in August stood at USD 5.4 billion across 45 deals - the highest monthly investment ever - and posted an increase of 5.4 times compared to USD 1.0 billion in August 2016.

The PE/VC deal street was boosted by two mega transactions -- Softbank's USD 2.5 billion investment in Flipkart and Singaporean sovereign fund GIC's USD 1.4 billion investment in DLF. These are also the largest deals ever in the e- commerce and real estate sectors, respectively.

In terms of number of deals, there was an 18 per cent growth in August compared to 39 deals last year, the report said.

Exits are also at a record in terms of monthly outflow at USD 1.9 billion across 25 deals in August and USD7.1 billion across 164 deals in 2017 till date. E-commerce emerged as the top investment sector for the month on account of the large Flipkart deal, EY said.

In terms of exits, August saw 25 exits totalling USD 1.9 billion, almost four times compared to the year ago month and the highest value of exits in a month ever. This is the second time that exits have crossed the USD1 billion mark in a month in 2017.

Also, the aggregate value of exits in 2017 so far, at USD7.1 billion, is the highest value of exits in any given year ever, surpassing USD6.7 billion exits in 2016. In terms of volume, with 25 exits, it recorded an increase of 19 per cent compared to August last year, the report said.

Commenting on the PE landscape, Mayank Rastogi of EY said, "The PE/VC numbers for August are significantly influenced by the two large investments by Softbank and GIC and the large Flipkart exit. However, even if these are to be excluded, investments and exits recorded healthy activity in both value and volume terms in the month.

"At this pace, investments should breach the USD 20 billion mark and exits the USD10 billion mark for the first time in the history of the PE/VC industry in the country."

Tiger Global selling its partial stake in Flipkart to Softbank for USD 800 million was the largest exit for the month. There was only one PE-backed IPO in August -- CX Partners sold its 4.8 per cent stake in Security and Intelligence Services India for USD 42 million through an OGS in the IPO.

From a sectoral perspective, e-commerce (USD 2.5 billion across four deals) saw the highest activity after a long time, due to the Softbank-Flipkart deal, followed by real estate (USD 1.6 billion across six deals) and financial services (USD 771 million across 10 deals.