PE investments in India hit 4-year high; e-commerce leads

Private equity investments in India grew 47.3 per cent to touch a four-year high of $10.9 billion in 2014, according to a report released by Venture Intelligence.

According to the report, the Year 2014 witnessed around 436 deals, leading with online services, especially e-commerce firms.

E-commerce companies received funding of almost $4.1 billion across 106 deals, which accounted for 37.6 per cent of the investment, according to Venture, a research service focused on private company financials, transactions and valuations.

Two home-grown online marketers, Flipkart and Snapdeal, collected almost $3 billion, it said.

Flipkart, through its Singapore-based holding company, raised $1.91 billion in three rounds, starting with a $210 million round in May, $1 billion in July and a $700 million round in December.

''All the three deals figured in the top 10 largest investments for 2014, and helped raise the total fund-raising by the 2007-founded Flipkart to about $2.7 billion,'' according to the report.

In 2013, the PE investment was $7.4 billion across 433 deals with only Flipkart featuring among the top 10 investments. Online services companies had raised $786 million across 86 deals or less than 11 per cent of the PE investment pie in 2013.

In October 2014, Japan's SoftBank Corp led a $637-million round for Snapdeal to become the biggest investor in the company. Softbank also led a $210 million round in online taxi aggregator Olacabs with participation of Tiger Global, new investor Steadview Capital and existing investor Matrix Partners India.

With 224 investments worth about $5.8 billion, IT & ITES companies topped in terms of both investment value, accounting for as much as 53 per cent of the pie, followed by the healthcare and life sciences industry, attracting $874 million across 44 transactions. The BFSI sector attracted $752 million across 32 transactions.

Some of the top investments in sectors other than e-commerce include Rs2,000 crore investment in L&T IDPL, the infrastructure development arm of Larsen & Toubro. The BPO industry witnessed two significantly large transactions during 2014, including TPG's acquisition of 34.5 per cent stake in Sutherland Globaland, the $260-million buyout of the Aditya Birla Group's BPO unit Minacs by CX Partners and Capital Square Partners.

On a region basis, companies based in the South attracted $4.8 billion across 158 deals, accounting for almost 44 per cent of the PE investment pie in value terms during 2014. West India-based companies received $3.2 billion in funding across 141 investments.

PE investments plunged to a four-year low of $7.4 billion (across 433 deals) in 2013, according to Venture Intelligence.

Its figures do not include investments in real estate.

Only Flipkart featured among the top-10 investments in 2013.