The first half of 2015 has emerged as best year for ‘exits’ by private equity (PE) and venture capital (VC) investors in India. Investors, who placed their bets, have realised over Rs.38,000 crore ($6 billion) through share sales in January to July, this year.
According to a study by Venture Intelligence, a data and information provider, “This seven month figure is 33 per cent higher than the $4.5 billion realised by investors in the previous years.”
This year is also likely to be the best year in terms of profitability of the exits. The first seven months of the year had provided PE investors with 16 exits in the 3-5x returns range, seven exits in the 5-10x range and three exits that fetched more than 10 times the invested capital.
Tamil Nadu alone saw three notable exits to the tune of $518 million from January this year.
Companies in the IT and ITeS, BFSI, Telecom and media and entertainment industries have led the list of successful exits in 2015 returning $2.4 billion, $1 billion, $770 million and $280 million respectively to investors.
As per the study, “2015 has also seen media and entertainment companies such as PVR Cinemas, Dish TV, Ortel Communications and UFO Moviez serve big exits to their PE investors.” While L Capital Asia completely exited PVR with a 3.46x return, Apollo Management exited DishTV partially with a 2.46x return.
PE investors have also reaped rich returns in 2015 by selling their stakes in publicly listed banking, financial services and insurance industry (BFSI) companies. TPG Capital sold its 20 per cent stake in Shriram City Union Finance for almost Rs.2,500 crore (to Apax Partners) fetching itself a 4.6x return on its 2008 investment. ChrysCapital and ICICI Venture exited ING Vysya Bank with returns of 3.6x and 2.7x respectively, the study said.
The first half of 2015 has also seen consolidation among PE and VC backed companies in the Internet and mobile sector using share swap arrangements. This includes the acquisition of mobile recharge and couponing firm Freecharge by Snapdeal (providing an exit route for Freecharge investor Sequoia Capital India) and Taxiforsure (backed by Blume Ventures, Accel Partners, Helion Ventures and Bessemer Ventures) by fellow taxi hailing app maker Ola.
