India Private Equity Report 2019 (Bain & Company)

Summary

• Private equity investments in India reached $26.3 billion across approximately 793 deals in 2018, making it the second-highest investment year of the last decade.p.4
• Consumer technology and BFSI remained the largest investment sectors, representing about 40% of total deal value in 2018.p.5
• India-focused dry powder remained healthy at $11.1 billion, ensuring adequate capital for high-quality transactions.p.6
• Capital raised by Alternative Investment Funds (AIFs) in India exceeded an estimated $7 billion in 2018, with registered AIFs rising to 518 as of February 2019.p.6
• The top 10 exits in 2018 dominated the market, accounting for 70% of total exit value.p.7

Key insights

1. India's PE deal value in 2018 was $26.3 billion, slightly below 2017 but remaining the second-highest total of the past decade.p.4
2. Average deal size in consumer technology fell by approximately 30% in 2018 due to a lack of mega-transactions comparable to SoftBank's $2.5 billion investment in Flipkart in 2017.p.5
3. Nonbanking financial companies (NBFCs) continued to attract major BFSI investments, expanding in areas like microfinance and housing finance.p.5
4. Market competition intensified as the number of active participating funds in India rose to 491 during 2015–17.p.5
5. Asia-Pacific's share of global PE fund-raising dropped to 14% in 2018 from 23% in 2017, driven by stricter PE regulation in China.p.6
6. Public-market sales were the most frequent exit mechanism overall, while strategic sales spiked in 2018 due to major consumer technology transactions.p.7
7. Consumer technology, enterprise technology, and BFSI yielded the highest multiples on invested capital among exited sectors over the prior five years.p.7
8. Investors cited strong management teams and clear buyer interest as primary drivers of successful exits.p.7