Private Equity Investors put in More Money in Fewer Companies in 2013; M&A Deal Value Improves 25%: VCCEdge Study

NEW DELHI, January 6, 2014 /PRNewswire/ --

Private equity investments in India have increased 12% in value terms from $9.5 billion in 2012 to $10.68 billion in 2013, according to annual transactions data released by VCCEdge, financial data platform of VCCircle.com.

Deal volume on the other hand dipped 13% to 655 deals from 751 deals in 2012, VCCEdge data showed.

"This shows private equity investors have been investing larger monies in fewer companies in 2013, an indication of winning companies attracting larger capital," Sahad P.V., Founder & Editor, VCCircle.com, said. "PE investors have been choosy."

Financials, consumer discretionary, and information technology were the most targeted sectors with investments worth $2.7 billion, $1.8 billion, and $1.6 billion, respectively. Together, the three sectors accounted for nearly 58% of the total private equity capital invested in 2013, the VCCEdge data showed.

The $1.26 billion investment by Qatar Foundation Endowment in Partners in New Delhi based Bharti Airtel Ltd. was the biggest deal announced during the year. This is followed by the $470 million investment in Alliance Tire Group by KKR India Advisors for a 90% stake.

Private equity exits

Private equity exit transactions in 2013 amounted to about $3.6 billion coming from 158 exit deals compared to the $4.86 billion worth of exits spread across 172 deals in CY2012.

However, the industry saw some of the larger PE exits like Warburg Pincus exiting Alliance Tire Group and TPG exiting Shriram Transport Finance.

Sector breakdown of private equity deals in 2013

                                           Deal Value    Avg. Deal Value
                                 Volume      ($ mm)           ($ mm)
    Consumer Discretionary        152       1,813.76            16
    Consumer Staples               26         247.63            11
    Energy                          2           4.45             2
    Financials                     99       2,770.73            31
    Health Care                    73       1,264.44            21
    Industrials                    60         676.80            13
    Information Technology        210       1,642.15            12
    Materials                      15         288.73            29
    Telecommunication Services      1          1,264         1,264
    Utilities                      17            711            59
              Total               655      10,683.66

Mergers & Acquisitions:

As for mergers & acquisitions in India in CY2013, the deal value increased by about 25% to $26.17 billion as against $20.93 billion recorded in 2012, VCCEdge data showed. Deal volume, however, inched up only from 761 deals to 781 deals during the period.

Energy and materials sectors witnessed the maximum M&A value with deals worth $6.02 billion and $5.23 billion, respectively. Together, they accounted for nearly 43% of the total M&A deal value seen during the year.

The biggest M&A deal recorded in 2013 was the acquisition of Rovuma Offshore Area 1 of Anadarko Petroleum Corp. by ONGC Videsh Ltd. for a total consideration of $2.64 billion. This was closely followed by the $2.51 billion (in cash and stock) acquisition of Holcim India Pvt. Ltd. by Ambuja Cements.

Sector breakdown of M&A deals in 2013 -

                                           Deal Value  Avg. Deal Value
                                 Volume      ($ mm)        ($ mm)
    Consumer Discretionary        144       1,096.19           8
    Consumer Staples               44         280.25           6
    Energy                         26        6,020.8         232
    Financials                    110       2,202.52          20
    Health Care                    63       3,305.84          52
    Industrials                   149       3,452.72          23
    Information Technology        117       1,712.41          15
    Materials                      85       5,235.59          62
    Telecommunication Services     12       2,011.86         168
    Utilities                      31         863.15          28
              Total               781      26,181.33

About VCCEdge

VCCEdge is India's leading financial data service for dealmakers. It's a fully hosted platform with a comprehensive database of C/PE/M&A deals, IPOs, directories, private and public company information, financials, shareholding structures, professionals and key developments related to companies. 

To know more, visit us at www.vccedge.com or write to us at [email protected].

About The VCCircle Network

The VCCircle Network, founded in 2005, is India's leading online financial media and data group. Owned by Mosaic Media Ventures Pvt Ltd, the VCCircle Network is headquartered in New Delhi with presence in Mumbai and Bangalore. The VCCircle Network is relied upon by an influential global community of deal makers, entrepreneurs and professionals for trusted content and information related to Indian investments, M&A, venture capital, private equity, investment banking, public equity, and emerging companies and sectors.  

For more details, please visit http://www.vccircle.com

Primary Media Contact: Rashi Sinha, [email protected], 91-9873424441