Private Equity investments in India in 2014, surged over 17% with a total investment value of 11492 million usd (as on Dec 22) across 459 deals as compared to 9781 million usd last year (in 469 deals). To a large extent, this was aided by increased interest in E-commerce, which has so far seen investments of over 2474 million usd in 48 deals as against 553 million usd last year(in 36 deals). Inclusive of E-Commerce, the Information Technolology and IT-enabled Services (IT/ITeS) sector attracted 4827 million usd in PE investments, more than double it had attracted in 2013.
Financial services was the other sector which saw a spate of deals, attracting attracted 1775 million usd of PE investments, showing a growth of 30%. Energy (mostly Renewables) and engineering and construction together witnessed 1531 million usd of PE investments, a 42% surge from the year before. Manufacturing and healthcare put in disappointing performances and saw decline of 62% and 33% respectively to 459 million usd and 868 million usd respectively.
Commenting on the same PwC India, said, ''the outlook for Private Equity in 2015 is positive, while in part, this is 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. A large number of investments made during this period are looking at exits and while some of them may seek IPO's, a number of them are likely to result in secondaries. As overseas investors gain confidence about India, strategic exits may also be possible.
Sectorally, Infrastructure is unlikely to see significant PE activity in 2015-most participants believe that the Government should be spending on Infrastructure and the experience of the private sector in Infrastructure investing so far has been unsatisfactory. It is quite likely however that as Government steps the pedal on infrastructure investments and revive the investment cycle, private investors including PE investors would be keen to invest in businesses providing services to the Infrastructure sector.
Demand pick up, owing to anticipated higher growth rates and a lower interest rate regime are also likely to create investment opportunities in the consumer sector including derivative sectors such as logistics, warehousing and business services. Healthcare and Lifesciences 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 - in particular the focus would be on technology enabled financial services platforms. E-commerce is expected to continue to generate interest, as is the IT sector ��" high growth levels in large developed markets like the US will help this trend.
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.''
