Private equity players cheer 2014 with $11 bln deals

Led by the booming e-commerce sector, private equity investments in India surged over 17 per cent with deals worth $11.49 billion and the outlook for next year also remains positive, says a PwC report.

According to the report by the consultancy firm, PE investments in India this year till December 22 stood at $11,492 million (excluding real estate deals) across 459 deals. In 2013, PE investments stood at $ 9,781 million by way of 469 deals.

The higher level of PE investments was largely driven by increased interest in e-commerce, which has so far seen investments of over $ 2,474 million in 48 deals as against $553 million last year (in 36 deals).

Inclusive of E-commerce, the information technology and IT-enabled Services (IT/ITeS) sector attracted $4,827 million in PE investments, more than double the value it had attracted in 2013.

A sector-wise analysis shows that financial services was another sector which saw a spate of deals, attracting $1,775 million of PE investments.

It was followed by energy (mostly renewables). Engineering and construction together witnessed $1531 million of PE investments.

Manufacturing and healthcare put in disappointing performances and saw decline of 62 per cent and 33 per cent respectively at $ 459 million and $ 868 million respectively, the report said.

Going forward, "the outlook for PE in 2015 is positive. In part, this could be attributed to the anticipated higher levels of growth owing to the economic reforms on the anvil, it is in part also attributed to the exit activity from the funds of 2006-08 vintage", PwC said.

Anticipated higher growth rates and a lower interest rate regime are likely to create investment opportunities in the consumer sector, it added.

Healthcare and Life-sciences are expected to continue to receive significant PE attention. Financial Services is also expected to continue to see significant interest on both book-based and fee-based businesses. E-commerce is expected to continue to generate interest, as would the IT sector – high growth levels in large developed markets like the US will help this trend, it said.

"Private equity investors are also going to be watching the impact of key reforms such as the introduction of the Goods and Services Tax regime – that said, there are some concerns about the ability of the Government to speed up reforms, and this would be key to the activity levels in 2015," the PwC report said.