Indian private equity firms see a stronger deal pipeline in 2017
NEW DELHI: A significant majority of private equity firms in India are optimistic about stronger deal activity this year, with funds looking at financial services and healthcare as the top sectors for investment, says a survey.
According to News Corp VCCircle's PE-VC Outlook Survey 2017, which covered heads and partners of large global and Asian funds that invest in India, 63 per cent are optimistic about a rise in deal activity in India in 2017 as against 2016.
"It is estimated that over $7 billion is waiting on the sidelines to be invested by India-focussed funds. This is a figure which is at a 6-year high," Nita Kapoor, Head, India New Ventures, News Corp and CEO, News Corp VCCircle, said, adding that investors have adopted a wait and watch approach in 2017 and are "cautiously optimistic".
The top three destinations for private equity players this year are financial services, voted by 66 per cent of respondents, health (52 per cent) and consumer discretionary (48 per cent).
"A lot would depend on macro factors such as continued implementation of economic reforms and clearing of uncertainties posed by geo-political developments for its deployment. Qualitative investment opportunities presented by companies with sound business models will determine the quantum of deal activity for the remainder of the year," Kapoor added.
Around 60 per cent of the VCs surveyed have expressed intent to increase funding of Indian start-ups in 2017, with 32 per cent being of the view that new VC firms are more likely to dominate deal activity during the year.
The key three sectors to attract venture capital funding are financial technology, health technology followed by digital media.
While the top domestic factor PEs and VCs are watching out for is the result of Uttar Pradesh elections, the major global unknown is the US trade policy changes that may adversely impact the IT and ITeS sector.
According to News Corp VCCEdge, there have been 129 deals amounting to $665 million so far in the first two months of the year, with 39 exits totalling $355 million.
According to News Corp VCCircle's PE-VC Outlook Survey 2017, which covered heads and partners of large global and Asian funds that invest in India, 63 per cent are optimistic about a rise in deal activity in India in 2017 as against 2016.
"It is estimated that over $7 billion is waiting on the sidelines to be invested by India-focussed funds. This is a figure which is at a 6-year high," Nita Kapoor, Head, India New Ventures, News Corp and CEO, News Corp VCCircle, said, adding that investors have adopted a wait and watch approach in 2017 and are "cautiously optimistic".
The top three destinations for private equity players this year are financial services, voted by 66 per cent of respondents, health (52 per cent) and consumer discretionary (48 per cent).
"A lot would depend on macro factors such as continued implementation of economic reforms and clearing of uncertainties posed by geo-political developments for its deployment. Qualitative investment opportunities presented by companies with sound business models will determine the quantum of deal activity for the remainder of the year," Kapoor added.
Around 60 per cent of the VCs surveyed have expressed intent to increase funding of Indian start-ups in 2017, with 32 per cent being of the view that new VC firms are more likely to dominate deal activity during the year.
The key three sectors to attract venture capital funding are financial technology, health technology followed by digital media.
While the top domestic factor PEs and VCs are watching out for is the result of Uttar Pradesh elections, the major global unknown is the US trade policy changes that may adversely impact the IT and ITeS sector.
According to News Corp VCCEdge, there have been 129 deals amounting to $665 million so far in the first two months of the year, with 39 exits totalling $355 million.
