They have been growing at a pace never seen before
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Mumbai: Investments in M&A and private equity deals particularly in the e-commerce sector have been growing at a furious pace indicating the huge and speedy investments needed for these companies to grow.
They have been growing at a pace never seen before and people are looking at these new age companies differently said Harish H.V., partner Grant Thornton India LLP. He said Flipkart has grown as large as Hindustan Unilever in just three to four years, which took HUL nearly 80 years.
“So they require cash constantly for technology, branding and building their business to scale, acquisitions etc.,” he said. As far as funding patterns are concerned, there is concentration of deal interest in the e-commerce space among fewer players. For instance, in H1 2015 M&A deals in e-commerce, the top 3 deals alone contributed to more than 56 per cent of the total estimated deal value. For PE investments, in the same period, top 20 investments contributed more than 70 per cent of total estimated investments in e-commerce.
M&A deals in IT&ITES totaled Rs 279 crore for the first six months of 2015 in 83 deals compared to Rs 630 crore for the whole of 2014 in 132 deals. However in e-commerce it was Rs 140 crore through 37 deals in Q1 2015 against '66 crore in 35deals for 2014.
In the case of private equity deals the IT&ITES sector received Rs 265 crore in 261 deals in Q1 215 compared to Rs 524 crore in 256 deals for 2014. whereas e-commerce got investments totalling Rs 227 crore Q1 2015 compared to 405 crore in in 2014 in 18 and 20 deals respectively.
( Source : deccan chronicle )
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