pe roundup – september 2017 - ey · pdf filepage 3 key trends - quarterly investments...

PE Roundup – September 2017

3Q2017September 2017

PE Quarterly Roundup – 3Q2017

Key Trends - Quarterly

Investments

► PE/VC investments in India in third quarter (3Q2017) witnessed a sharp increase on the back of some large deals

with size in excess of US$ 200 million each. 3Q2017 recorded the highest investments in a quarter in the history of

the Indian PE/VC industry ever, bettering the high recorded in the previous quarter.

► On a quarterly basis, investments increased 180% in value (US$ 8.7 billion vs US$ 3.1 billion in 3Q2016) and 17%

in volume terms (141 deals v/s 121 deals in 3Q2016). This was driven by almost a five-fold jump in minority growth

capital investing, with US$5.7 billion invested across 46 deals, the highest quarterly growth capital investment ever.

Two mega deals in the month of August contributed to this surge (accounting for 45% of deal value in 3Q2017) with

Softbank investing US$2.5 billion in Flipkart for a 30% stake and GIC investing US$1.4 billion in DLF for a 33%

stake in its commercial assets business. Buyout (US$920 million across 6 deals) and PIPE (US$599 million across

8 deals) deals also recorded strong growth in 3Q2017 of 132% and 201% respectively.

► Early stage / VC deals continued to dominate the deal volumes accounting for 51% (72 deals) of all deals in

3Q2017, similar to last year.

► 3Q2017 recorded 19 deals of value greater than US$100 million, aggregating US$7.0 billion and accounting for

80% of the investments during the period. 2017 has witnessed and increasing proportion of large sized deals,

further validating the growing confidence of investors and maturing of the Indian PE market.

► From a sector perspective, Ecommerce, Real Estate, and Financial Services were the leading sectors in terms of

investments in 3Q2017. Ecommerce recorded US$2.6 billion across 18 deals primarily driven by Softbanks’s

US$2.5 billion investment in Flipkart, Real Estate recorded US$2.3 billion across 13 deals and Financial Services

recorded US$1.4 billion across 25 deals in 3Q2017. Technology, one of the top sectors to attract PE/VC funding in

the previous quarters, saw investments decline by 44% in 3Q2017 to US$235 million, compared to same period last

year, despite being at par in terms of deal volume at 24 deals, mainly due lower ticket size of investment.

*** RCP – Retail & Consumer Products, RHC-Real Estate, Hospitality & Construction, CBP – Cement & Building Products

EY Analysis of VCCEdge Data

Key Trends - Quarterly

Exits

► Exits grew 128% by value in 3Q2017 (US$ 4.7 billion Vs US$ 2.0 billion in 3Q2016) while number of deals remained

at similar levels, recording the best quarterly performance for exits since 2009, driven by increase in exits via capital

markets (both primary and secondary) as well as secondary divestments (sale to other PE funds).

► Exits via IPO recorded US$1 billion in value terms, highest value for exits via IPOs in a quarter, mainly driven by the

largest IPO exit ever by a PE fund in India, which saw Fairfax selling its 12% stake in ICICI Lombard for US$558

million in September 2017. The other large IPO exit in 3Q2017 saw Kedaara Capital, IFC, Warburg Pincus, and

ChrysCapital sell their stake in AU Small Finance Bank Ltd for US$234 million. In comparison, the largest IPO exit

during 2009 to 2016 was of Equitas Holding, where a bunch of investors sold stake worth US$224 million in 2016.

The total value of exits via IPO’s in 2017 till date is higher than the aggregate value recorded between 2009 and

2016. IPO markets have been quite active since 2016, with 12 PE backed IPOs in 2017 till date (17 IPOs in the full

year of 2016). Moreover, 12 more PE backed IPO’s are awaiting listing by the end of 2017 including the likes of

MAS Financial Services, Lemon Tree Hotels Ltd etc.

► Open market exits recorded US$1.5 billion (32 deals) in 3Q2017, more than double the value recorded in 3Q2016

and the highest quarterly value of exits since 2009. Exits via secondary sale (sale to other PE funds) recorded

US$1.4 billion (9 deals); again, highest quarterly value of exits since 2009 for secondary sale which featured the

largest Ecommerce exit in India, with Tiger Global selling its partial stake in Flipkart for US$800 million to Softbank

in August 2017.

► From a sector perspective, Financial Services (US$1.6 billion across 12 exits), Ecommerce (US$819 million across

2 exits), and Healthcare (US$422 million across 8 exits) were the top sectors for exits in 3Q2017.

Fund Raise

► 3Q 2017 recorded US$2.2 billion in fund raise, highest quarterly fund raise since 2010, the largest being US$750

million raised by Kedaara Capital. There were US$1 billion new fund raise plans announced in 3Q2017.



PE/VC headline trends – Quarterly

US$ mn #

2,698 4,813 3,450 5,139 6,003 5,043 4,310 3,658 3,097 5,138 4,185 6,874 8,688

113 126

181 188220

178146

164

121157

130

168141

0

50

100

150

200

250

-

2,000

4,000

6,000

3Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017

Investments

991 1,081 1,161 2,749 1,205 1,358 2,067 1,073 2,046 1,483 2,033 2,790 4,668

48 4960 59

66 69

42 44

64 59 6170 65

0

20

40

60

80

-

1,000

2,000

3,000

4,000

5,000

3Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017

Exits

470 1,279 1,892 1,938 1,285 1,325 2,075 942 320 976 1,287 719 2,234

5

10

5

11 12

8

1614

2

911

9

13

0

5

10

15

20

-

500

1,000

1,500

2,000

2,500

3Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017

Fund Raise


Investments – Q3 Analysis


3,097

8,688

3Q2016

3Q2017

Total Investment US$m

121

141

3Q2016

3Q2017

No. of Deals

780

398

199

565

1,155

741

920

599

726

5,703

Debt investment

Buyout

PIPE Financing

Start-up/ Early Stage

Expansion/ GrowthCapital

Deal Type US$m

15

7

7

54

38

9

6

8

72

46

Debt investment

Buyout

PIPE Financing

Start-up/ Early Stage

Expansion/ GrowthCapital

Deal Type #

148

261

809

914

965

185

254

632

627

6,990

< $10m

$10m - $20m

$20m - $50m

$50m - $100m

> $100m

Deal Size US$m

45

17

24

13

5

49

17

20

10

17

< $10m

$10m - $20m

$20m - $50m

$50m -$100m

> $100m

Deal Size #

** Deal value not available on 26 out of 141 deals in 3Q2017 and 17 out of 121 deals in 3Q2016


Investments – Q3 Sector Cut


39

79

235

302

544

544

684

1,354

2,254

2,590

Pharmaceuticals

Food and Agriculture

Technology

Infrastructure

Healthcare

Power and utilities

RCP

Financial services

RHC

Ecommerce

Top Sectors US$m3Q2017

3Q2016

5

2

1

5

10

17

5

20

24

13

3

3

5

12

13

13

14

18

24

25

Pharmaceuticals

Infrastructure

Power and utilities

RCP

Healthcare

RHC


Ecommerce

Technology

Financial services

Top Sectors #


Top Investments

Top Investments in 3Q2017

Company PE Investor Sector Stage US$mnStake(%)

Flipkart SoftBank Vision Fund Ecommerce Growth Capital 2,500 30

DLF Cyber City Developers Ltd GIC RHC Growth Capital 1,390 33

Carnival's Chandigarh Property Blackstone RHC Buyout 340 100

Mytrah Energy India Pvt. Ltd Piramal, APG Power and utilities Debt deal 300 NA

Oravel Stays Pvt. Ltd.Sequoia, SoftBank and others

RCPStart-up/ Early Stage

260 NA

RBL Bank Ltd.CDC ABG Capital, Multiples and others

Financial services PIPE Financing 259 8

Karvy Computershare Ltd. General Atlantic. Financial services Buyout 240 83

RBL Bank LtdABG Capital , CDC, Multiples and others

Financial services PIPE Financing 220 NA

Radiant Life Care Pvt. Ltd. KKR Healthcare Growth Capital 200 49

Vini cosmetics pvt. Ltd. Sequoia, Westbridge RCP Growth Capital 172 NA

Flipkart SoftBank Ecommerce Growth Capital 2,500 30


Exits – Q3 Analysis


2,046

4,668

3Q2016

3Q2017

Total Exits US$m

64

65

3Q2016

3Q2017

No. of Exits

87

1,217

90

653

1,044

346

382

1,424

1,472

IPO

Buyback

Strategic

Secondary

Open Market

Exit Type US$m

4

20

5

35

6

7

11

9

32

IPO

Buyback

Strategic

Secondary

Open Market

Exit Type #

-

-

510

53

-

334

246

323

367

422

819

1,561

Telecom

Power & Utilities

Technology

Healthcare

Ecommerce

Financial Services

Top Sectors US$m

0

1

5

4

0

15

1

2

6

8

2

12

Telecom

Power & Utilities

Technology

Healthcare

Ecommerce

Financial Services

Top Sectors #


Top Exits

Top Exits in 3Q2017


Company Sector Sellers Buyer Exit Type US$mnStake (%)

Flipkart Ecommerce Tiger GlobalSoftBank Vision Fund

Secondary 800 0

ICICI LombardFinancial Services

Fairfax. NA IPO 558 12

Max Financial Services Ltd.

Financial Services

Goldman Sachs NAOpen Market

358 15

Genpact Ltd. Technology Bain Capital, GIC NAOpen Market

294 5

Mytrah Energy India Pvt. Ltd.

Power & UtilitiesApollo Global, Aion, Goldman Sachs, DFC Alternatives

Piramal, APG Secondary 270 0

Tikona Digital Networks Pvt. Ltd., 4G Business

Telecom IFC, Goldman SachsBharti Airtel Ltd.

Strategic 246 0

AU Small Finance Bank Ltd.

Financial Services

Kedaara, IFC, Warburg Pincus, ChrysCapital

NA IPO 234 21

Phoenix MillsReal Estate, Hospitality & Construction

IL&FS,CPPIB & Others Phoenix Mills Buyback 210 0

Manipal Health Enterprises Pvt. Ltd.

HealthcareTrue North, FaeringCapital

Temasek Secondary 171 18

Matrimony.Com Ltd. E-commerceMayfield, Bessemer and others

NA IPO 156 29


Fund Raise

Top Fund Raise in 3Q2017

Status Fund US$m Strategy Remark

Raised Kedaara 750 sector agnostic Final close of second fund

Raised Morgan Stanley 450 Infrastructure Final close of US$1 billion fund

Raised SAIF 350 Early stage Final close of third fund

Raised Madison India 230 sector agnostic Final close of fourth fund

Raised Motilal Oswal Real Estate 156 Real Estate Final close of third fund


PE Monthly Roundup – September 2017

PE/VC headline trends – Monthly

US$ mn #

388 766 71 646 880 602 550 843 1,383 564 352 2,219 2,096

2218 16

25

15

24 22

32

24

148

33

24

0

10

20

30

40

-

500

1,000

1,500

2,000

2,500

Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17

Exits

290 335 450 191 331 850 106 377 200 232 436 110 16890

2

4

6

8

10

0

500

1000

1500

2000


Fund Raise

1,231 1,185 927 3,026 1,196 393 2,617 1,920 3,447 1,507 1,470 5,424 1,795

42

60

41

56

43

30

5867

5645 45 50 46

0

20

40

60

80

-

2,000

4,000

6,000


Investments


Key Trends

► September 2017 recorded 46% increase in value of investments, while in terms of volume the increase was 9.5%

compared to same period last year (US$1.8 billion across 46 deals vs US$1.2 billion across 42 deals in September

2016). However, on a month-on-month basis, there was sharp decline of 67% in value terms due to the two mega

deals recorded in August 2017 of Flipkart and DLF as mentioned above.

► September 2017 recorded over five times increase in value of exits compared to same period last year (US$2 billion

across 24 exits vs US$388 million across 22 exits in September 2016). However, on a month-on-month basis, exits

declined 5% in value terms and 27% in volume terms.

► On a monthly basis September 2017 recorded US$1.7 billion in fund raise.



40 (15)128 (9)

206 (6)117 (2)

1302 (7)

<$10Mn $10Mn -$20Mn

$20Mn -$50Mn

$50Mn -$100Mn

>$100Mn

Deal Size US$ mn (Volume)

Investments – US$1.8 bn over 46 deals


** Deal value not available on 7 out of 46 deals in Sept 2017

16

26

27

30

125

226

230

300

336

447

Tarvel

Healthcare


Logistics

Technology

Financial services

RHC

Infrastructure

Power and utilities

RCP

Value US$ million

2

2

3

3

4

4

5

5

6

8

Power and utilities

Infrastructure


Business and Prof Services

RHC

Healthcare

RCP

Ecommerce

Technology

Financial services

Volume

692 (16)

435 (23)

51 (2)

300 (2) 315 (3)

Expansion/Growth

Start-up/Early Stage

PIPE Buyout Debt

Deal Stage US$ mn (Volume)


Investments – Monthly sector cut


211

68

2509

709

182

383

1640

230

1649

200

356

772

226

708

13

85

125

200

300

150

24

80

91

0 1000 2000 3000 4000 5000 6000

May

Jun

Jul

Aug

Sep

Investment by Sector – US$mn

6

3

9

4

5

4

5

3

6

4

11

12

7

10

8

8

15

8

6

6

2

3

3

3

5

15

5

7

16

10

- 10 20 30 40 50 60

May

Jun

Jul

Aug

Sep

Investment by Sector – No. of Deals

Ecommerce RHC Financial Services Technology Infrastructure RCP Automotive Power & Utilities Others Healthcare


Investments – Monthly (deal size and type)

277

200

200

310

117

2,192

1,069

971

4,716

1,302

May

Jun

Jul

Aug

Sep

Deal Size Trend - Value (US$ mn)

26

20

15

14

15

7

4

6

2

9

10

3

5

9

6

3

3

3

5

2

4

5

6

6

7

5

10

8

10

39

May

Jun

Jul

Aug

Sep

Deal Size Trend - No of Deals

<$10Mn $10Mn - $20Mn $20Mn - $50Mn

$50Mn - $100Mn >$100Mn NA

614

514

4,489

693

168

420

150

435

274

236

189

316

May

Jun

Jul

Aug

Sep

Deal Type Trend - Value

15

8

12

16

16

20

31

24

21

23

5

2

4

2

3

1

2

2

2

12

5

3

3

3

May

Jun

Jul

Aug

Sep

Deal Type Trend - No of Deals

Expansion/ Growth Capital Start-up/ Early StagePIPE Financing BuyoutDebt deal


Top Investments

Top Investments in Sept 2017

Company PE Investor Sector Stage US$mnStake

(%)

Mytrah Energy India Pvt. Ltd Piramal, APG Power and utilities

Debt deal 300 NA

Oravel Stays Pvt. Ltd.Sequoia, Softbank and others

RCPStart-up/ Early Stage

260 NA

Vini cosmetics pvt. Ltd. Sequoia, Westbridge RCP Growth Capital 172 NA

Janalakshmi Financial Services Pvt. Ltd.

TPG, Morgan Stanley and others

Financial services

Growth Capital 161 NA

Simhapuri Expressway Ltd. Brookfield Infrastructure Buyout 150 100

Rayalseema Expressway Ltd. Brookfield Infrastructure Buyout 150 100

Leela Palace Hotel Marigold Capital RHC Growth Capital 109 NA

TVS Emerald ASK Group RHC Growth Capital 62 NA

Apttus IncPremjiInvest , SalesforceVentures and others

Technology Growth Capital 55 NA

Mahindra Lifespace Developers Ltd. IFC RHC PIPE Financing 50 NA



Exits – US$2.1 bn across 24 deals in September


Exits in Sept

42 (1)

128 (3)

0 (4)

1076 (6)

644 (11)

IPO Buyback Strategic SecondarySale

Open Market

Exits by Type US$mn (Volume)

144 (7)

78 (2)

133 (1)

156 (2)

211 (4)

323 (2)

1048 (6)

Others

RCP

Media & Entertainment

E-commerce

RHC

Power & Utilities

Financial Services

Exits by Sector US$mn (Volume)


Exits – Top Exits

Top Exits in Sept 2017


Company Sector Sellers Buyer Exit Type US$mnStake (%)

ICICI Lombard General Insurance Company Ltd

Financial Services Fairfax NA IPO 558 12

Max Financial Services Ltd.

Financial Services Goldman Sachs NA Open Market 358 15

Mytrah Energy India Pvt. Ltd.

Power & UtilitiesApollo Global, Aion, Goldman Sachs, and others

Piramal, APG Secondary 270 0

Phoenix MillsReal Estate, Hospitality & Construction

IL&FS,CPPIB & Others

Phoenix Mills Buyback 210 0

Matrimony.Com Ltd. E-commerceMayfield, Bessemer Venture, others

(blank) IPO 156 29

Shop CJ NetworkMedia & Entertainment

Providence HomeShop18 Strategic 133 50

Vini Cosmetics Pvt. Ltd.Retail and Consumer products

Bay Capital Partners Ltd.

Sequoia Capital,Westbridge

Secondary 78 0

Dixon Technologies India Ltd

Power & UtilitiesIndia Business Excellence Fund-I

NA IPO 53 17

Kajaria Ceramics Ltd. Industrial products Westbridge NA Open Market 40 2

Syngene International Ltd.

Healthcare True North NA Open Market 34 2


Fund Raise

Top Fund Raise/Announcements in Sept 2017

Status Fund US$m Strategy Remark

Raised Kedaara 750 sector agnostic Final close of second fund

Raised Morgan Stanley 450 Infrastructure Final close of US$1 billion fund

Raised Madison India 230 sector agnostic Final close of fourth fund

Raised Motilal Oswal Real Estate 156 Real Estate Final close of third fund


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