The ongoing calendar year has been the best year for cashing out by private equity and venture capital investors in India.
They have realised over $6 billion (₹38,000 crore) via share sales in the January-July 2015 period, about 33 per cent more than the $4.5-billion realised in the best years before (2010 and 2005), according to a study by Venture Intelligence, a leading source of information on private company financials transactions and their valuations.
2015 is also likely to be the best year in terms of profitability of the exits, the study said. The first seven months of the year had provided PE investors with 16 exits in the 3-5 times returns range, seven exits in the 5-10 times range and three exits that fetched more than 10 times the invested capital.
Companies in the IT & ITES, BFSI, Telecom and Media & 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, a press release from the company said.
According to the study, PE/VC investors realised over $2 billion via strategic sales (that is, sale of stake in the portfolio company to a larger company) in January-July 2015 — $200 million more than the $1.8-billion realised in the previous best year of 2005.
Exits through secondary sales (that is, exit via acquisition by another PE firm) hit $1.6 billion in 2015 — exceeding the previous (full year) high of $1.5 billion (in 2013).
PE/VC investors also sold shares worth $1.9 billion in already listed companies (like Shriram City Union Finance, ING Vysya Bank, and so on) via the public markets in the first half of 2015.
With number of PE-backed IPOs picking up, Venture Intelligence expects the exits via Public Market Sales route to exceed the previous high by the year-end, the release added.