The Indian private equity (PE) market remained a hotbed for dealmaking in 2018 with investments across 793 deals at $26.3 billion, which was the second highest in the last decade in terms of total investment value, said a report released by Bain and Company in partnership with the Indian Private Equity & Venture Capital Association.
PE funds are also increasingly prioritising deal quality over quantity, with the top 15 deals comprising about 40% of the total deal value and the number of deals greater than $50 million increasing from the previous year.
The market for exits remained strong as well, with 265 exits valued at nearly $33 billion in 2018, signaling investor confidence in the Indian market. Nearly half of last year s exit value resulted from the $16-billion sale of Flipkart to Walmart. However, even exluding that, 2018 was one of the best years for exits in the last decade, the report stated.
In addition, the industry had an excellent run at raising funds to the tune of $714 billion from investors during the year, the third-largest amount on record, bringing the total capital raised since 2014 to $3.7 trillion.
At the same time, diversified fundraising across Asia-Pacific had slowed down, as a result of China s decision to tighten rules on PE investment. However, India-focused dry powder remained healthy at $11.1 billion, again an indication that high-quality deals do not lack capital, the report said.
The average deal size in 2018 remained somewhat flat. Small-ticket deals of less than $25 million decreased, as did those for transactions greater than $100 million, the report pointed out.