PE investment shoots up 64% to $963 million in May: Thornton

Private equity investment in May jumped 64 per cent in value terms with deals worth USD 963 million, mainly driven by big ticket investments, says a report.

According to assurance, tax and advisory firm Grant Thornton, there were 67 PE deals worth USD 963 million in May this year, while in the same month last year, there were 74 such transactions worth USD 587 million.

For the January-May period, though the number of PE deals declined, but investment values have shown an improvement, indicative of investors beginning to take bigger bets on the Indian economy, more specifically in IT & ITeS and retail and consumer sector.

During the first five months of this year, there were 349 PE deals worth USD 6,402 million, while in January-May period last year, there were 421 such deals worth USD 5,487 million.

The month of May was dominated by investments in startups which contributed to 58 per cent of total investment volumes. Startups in sectors such as enterprise application and infrastructure, travel, transport and logistics, and FinTech attracted significant attention from investors and constituted over 51 per cent of startup investment volumes.

According to industry reports, May this year witnessed one of the largest FDI in the real estate this year with Xander Group's acquisition of Shriram properties’ Gateway IT SEZ in Chennai for USD 350 million.

Other sectors such as IT & ITeS, e-commerce and agriculture sectors also attracted large investments of over USD 50 million during the month.

In terms of sector spread, real estate seems to be gaining interest and contributed more than 40 per cent in terms of deal value. The remaining 60 per cent was mostly contributed by the technology sector.

"All eyes seem to be now on GST implementation and its impact on not only trade and economy, but more importantly on investor interest. Since there is now clear visibility on this, we should see good traction in both M&A and PE," Grant Thornton India LLP Partner Prashant Mehra said.

Mehra further noted that with India continuing to be favoured destination among foreign investors, we should hopefully see more in-bound action going forward.