VCCEdge, the financial research platform of VCCircle, has released the Deal report for the quarter ending June 2017. The report presents a datadriven overview of PE, M&A and Equity Capital Markets deals in India, with sector and regionwise analysis. The quarterly report includes a special "startup" section, this is in keeping with our focus on startup related news and analysis we present in the "VCC Startups" section on our website www.vccircle.com.
Capital markets, which are in a state of buoyancy since the start of the year, seem to be the current center of investment action. Firms seeking capital, in particular companies in the financial sector, flocked to the equity markets to garner what turned out to be the highest level of fund raising through the public route in the last five years.
PE
PE investors' seems to be extremely cautious and this is clearly reflected in the steep decline in the deal activity. That said, the marked rise in the total value of investments and the steady ticket size of deals, reflects cautious enthusiasm on the part of PE investors who are flush with dry powder.
PRIVATE EQUITY INVESTORS FUND WITH
Exits got harder to come by with the least number of exit deals happening this quarter in the last five years. Exit activity nearly halved in the IT, financials, and consumer discretionary sectors as against same time last year. Exit value also decreased to $1.55 billion in the last quarter compared with $2.06 billion in the previous quarter, however, Secondary sales exit values bounced back as the preferred exit route replacing Open Market (accounted highest value in the second quarter last year).
M&As
April June of 2017 was the weakest quarter for merger and acquisition activity in 5 years with deal count down 28% and aggregate deal value down 72% on a QoQ basis. This quarter saw companies engaging in smaller deals with just one deal crossing the $1 billion mark, unlike the last three-quarters where mega deals of $10 billion and above spiked the overall deal value.
ACTIVITY FALLS ACROSS SECTORS
Most of the deals in this quarter happened in the Consumer Discretionary sector, where a third of deals were in Internet Retail companies.
ECM
ECM deal value of $4.8 billion in Q2 2017 across 34 deals, saw its highest level in the last 18 quarters. Deal values more than doubled QoQ and quadrupled YoY indicating bigticket deals in Q2 2017.
BANKS PREFER TO RAISE CAPITAL THROUGH QIPS
Although IPOs were the most active of all ECM deal makers in Q2 2017, QIPs dominated the ECM value with 7 deals accounting for 80% of the total ECM deal value.
Startups
Startups made an uneventful start this year and continued to decline further with deal activity down both on QoQ and YoY basis by 20% and 44% respectively.
INVESTORS APPEAR TO BE DESERTING STARTUPS
A revival in the startups funding space seems some way off with declines in both the number and value of deals sealed; the aggregate value of Angel/Seed investments being the exception.
VCCEdge is a leading player in providing India centric financial, deal and company information. The platform has indepth profiles of private and public companies, deals including private equity, venture capital, M&A, equity capital market issues and debt offerings, key developments, and detailed data on investors and their portfolios. VCCEdge provides information on demand and helps reduce research time, for users including, strategy managers, investors, bankers and consultants.
