Mumbai: Global private equity (PE) players made good a sudden jump in valuation of their investments in 2016 and chose to pull out a record USD 10.3 billion from domestic markets.
The value of PE investment was stagnant, or even in some cases declined, over the past one decade. This time, they mostly shied away from pumping in more dollars after their investment in a slew of start-ups hit an all-time high in 2015. It translated into a 30 per cent decline at USD 16 billion in 2016, down from USD 23 billion in 2015.
The total PE exits rose 1 per cent to USD 10.3 billion, from USD 9.4 billion in 2015. This is the highest-ever pullout from the country, according to brokerage house Bain and Co. Deal-wise, the figure slipped to 199, from 213, down 7 per cent, and the top 10 formed 48 per cent of the total exit value.
PEs fell back on a variety of models to exit, including strategic sales, secondary deals and initial public offerings. The first two accounted for as much as 47 per cent in 2016, up from 31 per cent in 2015, according to the brokerage data.
"Total exit value crossed USD 10 billion mark for the first time at USD 10.3 billion in 2016, up from USD 9.4 billion in 2015, boosted by deals in healthcare and manufacturing sectors, which alone saw as much as USD 2.2 billion and USD 2.3 billion, respectively, worth of exits," Bain and Co said.
In contrast, in 2015, these two sectors saw exits worth only USD 1 billion and USD 900 million, respectively. The brokerage said listings on the stock exchanges dried up towards the end of the year. Even so, 2016 was the best year for IPOs after 2010, netting Rs 26,473 crore in fresh capital from the primary market.
Leading American player KKR alone netted USD 1.7 billion by selling holding in companies such as Alliance Tires and Gland Pharma to the Japanese Yokohama and the Chinese Fosun, respectively.
Other major exits included Cipla's 16.7 per cent stake sale in the US-based clinical-stage bio pharmaceutical company Chase Pharma to drugmaker Allergan for USD 1 billion. These three deals constituted 18 per cent of the total exit value in the year....