Private equity (PE) and venture capital (VC)-backed exits have surged in the past two years, doubling to USD 31.8 billion in 2018, consultancy firm Bain and Co told Mint. The exits were driven by large strategic sales and secondary exits.
Lalit Reddy, a partner at Bain and Co, was quoted as saying by the daily that while the Walmart-Flipkart deal contributed to a large part of exits, healthy public markets, continued strong interest, and the willingness of PE firms to make bigger bets in the Indian market resulted in other large exits.
Owing to the jet-speed rise of companies such as payment and retail platform Paytm and cab-hailing service provider Ola, consumer tech saw the largest deal both in terms of value and volume.
“It is easy to see the massive potential (of consumer tech) looking at the current levels of penetration of e-commerce, online delivery and social networking. So, it is only natural that the space is attracting a lot of interest and will continue to do so," Reddy told Mint.
The year 2018 saw 259 exits, a rise of 23% from the 211 exits in 2017, riding on the back of deals in spaces such as consumer technology, IT and IT-enabled services. Blackstone’s USD 1 billion sale of Intelenet to French outsourcing firm Teleperformance was one of the biggest deal in IT-enabled services sector.
According to the report, public markets were the most preferred mode of exit, over strategic sales, secondary sales and buybacks. According to Reddy in the coming years, exits will also see momentum in sectors which were ripe for investments three-seven years ago, like IT services, financial services and healthcare.