PE/VC investments, exits hit record in 2017 at $26.8b, $13b

Mumbai, Jan 15 (PTI) Investments by private equity/venture capital firms touched a record in 2017 at USD 26.8billion, as against USD 16.2 billion in 2016, and pulled out arecord USD 13 billion from the country, says a report.According to data collated by EY, Softbank's USD 2.5billion investment in online retail major Flipkart led the PEinvestment pack, making it the highest-ever in the country.According to the data, PE/VC exits almost jumped two-fold toUSD 13 billion across 257 deals, driven by record level ofexits via open market, secondary sale and IPOs.The year just gone-by was also the best for PE-backedIPOs featuring the largest IPO exit ever with Fairfax sellingits 12 per cent stake in ICICI Lombard for USD 558 million.According to EY's private equity deal tracker, 2017was the best year for both investments and exits, surpassingtheir respective previous highs. While investments rose 37 percent to USD 26.8 billion across 589 deals, the year also saw257 exits worth USD 13 billion, almost double the previoushigh recorded in 2016."Apart from some unforeseen global macroeconomic risksin 2018, the PE/VC sector is likely to continue to see agrowth in investments as well as exits. Capital markets areexpected to stay buoyant and IPOs should continue to be acompelling exit story for the year," the report noted.In terms of investments the deals saw a sharp increasein value with 19 deals coming in excess of USD 300 millionincluding four deals of over USD 1 billion.Growth, startups and pipe deals witnessed multifoldincrease in investment inflows compared to 2016 and 2017 wasthe best year for growth deals at USD 13.8 billion which was2.4 times the value recorded in 2016.This was primarily driven by four mega dealsaccounting for 46 per cent of the value of growth deals, threeinvolving Softbank's investments in the e-commerce and fintechspace and another involving GIC's investment in DLF.Startup/early-stage investments at USD 3.5 billionacross 311 deals was 1.7 times more than the value compared to2016 and other deals at USD 3.7 billion across 38 deals was2.4 times more.In comparison, debt and buyout deals had a rathermuted performance in 2017, falling 19 per cent and 14 per centrespectively. The year saw USD 3.4 billion worth of buyoutsacross 26 deals and US D2.4 billion in debt investments across55 deals.In terms of sectors, e-commerce investments led bySoftbank (USD 4.8 billion across 63 deals), financial services(USD 7.1 billion in 103 deals), and real estate (US D4.8billion in 50 deals) led the pack. Technology was the topsector with 125 deals in terms of volume."With lots of dry powder awaiting deployment, need forcorporates to deleverage and rise of a new business class areexpected to drive the PE/VC story well past the highs seen in2017," EY said in the report.In terms of exits, the sharp rise was driven by a 3.7fold increase in open market exits compared to 2016 (US D6.2billion as against USD 1.7 billion in 2016), thanks to buoyantcapital markets.From a sector perspective financial services saw themaximum exits at USD 3.9 billion in 51 exits, telecom saw USD1.9 billion in three deals, e-commerce saw USD 1 billionacross eight exits and technology saw USD 1.5 billion across24 deals.In terms of fund raising through exits, the year saw USD 4.9 billion, up 15 per cent from 2016. Kedaara's USD 750 million and Chrys Capital's USD 600 million sector agnostic fund raises were the largest. New fund raising plans announced declined by 43 per cent to US D12.2 billion.

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