Fairval

Notes on Indian equities, sectors and economy

PE investing has moved up a gear

Posted by fairval on June 4, 2018

Private equity / venture capital investing continued its robust trend in May’18. The month saw deal commitment of USD2.3B, if we count the platform BPO deal backed by Warburg.

The first 5 months of 2018 have seen more than USD1B committed each month.

PEdataMay18

Between 2008 and 2016, annual PE deal amounts used to hover around USD10B, plus or minus a bit on either side. The average annual amount over this phase is just over USD 9B. 2017 saw a break from this, with annual deal amount crossing USD17B.

2018 is set to push this up further. In first 5 months, we are already at almost USD10B of deal commitments. The rolling 12 month total is at an all time high, crossing USD20B.

This could well be a secular trend. India is now pretty much the world’s 5th largest economy, set to nose ahead of UK and France this year or next (and already much bigger if we count our substantial informal economy). Such things do have a signalling affect. Maybe that explains this heightened deal fervor.

We should also note, in a global context, these amounts are not large. It is just that India is coming up the curve. Annual PE investment in US. for example, is upwards of USD600B, or 20-25x more than India.

(our numbers are a bit less than other firms quoting PE investments. If the recipient company is not incorporated in India, we do not count deals in such companies, even if substantial work force may reside in India).

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

 
%d bloggers like this: