Comments
A new Government and improved investor sentiment is expected to result in “greater private equity deal activity” in India in the second half this calendar year, EY, a professional services firm, has said.
The deal activity will also somewhat hinge on the Union Budget to be presented in early July. But there is clearly increased optimism in the private equity space, if the latest EY analysis of the half-yearly investment trends is anything to go by.
The first half of 2014 saw private equity/venture capital deal value of $4.93 billion, which is a 36 per cent increase over the deal value of $3.63 billion. However, the aggregate deal value in first half this year was lower by 10 per cent compared with the same period in 2013.
DEAL VOLUMES
The deal volumes saw an improvement at 229 deals in January-June this year, recording an 18 per cent increase over 194 deals in the second half of 2013. The first half of 2013 saw 198 deals, lower than the deal volumes for the latest six months under review.
“It may not be right to see this trend as an overall rebound, but there is clearly optimism in the private equity space. It is hoped that the upcoming Budget will help spur such investments”, Mayank Rastogi, Partner-Private Equity, EY, told Business Line.
Much would depend on the Budget and the way the crucial issues like general anti avoidance rules (GAAR) are handled.
Industry has been lobbying hard that the GAAR framework—to come into effect from April 1, 2016—should be postponed by three more years.
POST ELECTIONS
Investor sentiment has certainly improved in the last month after the results of the general elections. June 2014 recorded $931 million invested across 46 deals.
There has also been rising trend of direct investments by large global LPs and sovereign funds—some of the investments include L&T IDPL, Jaypee power assets, Kotak Mahindra Bank etc.
Investments in the technology sector have also seen a sustained increase with 60-plus investments in the first half of 2014. Around 80 per cent of these were in the venture/early stage category.
E-commerce businesses continued to attract investor interest with more than three-fourth of a billion dollars (about $760 million) invested in this segment in first half of 2014. This was little more than 15 per cent of overall investments during the period under review.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.