PE investments jump 55% to all-time high of $24 bn across 591 deals in 2017

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Flipkart received India’s largest ever PE investment of $2.5 billion in a single round from Softbank

Private equity firms invested $23.8 billion across 591 deals in 2017, making it the biggest year for PE investments in India, says a report.

According to deal tracker Venture Intelligence, the investment value is 39 per cent higher than the previous high of $17.1 billion (recorded in 2015) and 55 per cent higher than $15.4 billion invested during 2016. In terms of number of deals the year 2017 saw 21 per cent less activity as compared to 2016 (731 deals), indicating large number of big-ticket transactions.

“The year witnessed 31 investment deals with size greater than USD 200 million, aggregating to $15.4 billion or 65 per cent of the total investments,” the report said. These figures include venture capital investments, but exclude PE investments in real estate.

In terms of industries, IT/ ITeS companies accounted for 45 per cent of the value pie attracting $10.7 billion worth investments across 325 transactions.

Flipkart received India’s largest ever PE investment of $2.5 billion in a single round from Softbank and another $1.4 billion from strategic investors Tencent, eBay and Microsoft. Softbank also invested $1.4 billion in mobile wallet and payments firm One97 Communications, which owns the Paytm brand. BFSI (Banking, Financial Services and Insurance) companies continued to enjoy the second spot attracting $4.40 billion across 61 transactions.

The sector was led by Bain Capital’s $1.04 billion investment in Axis Bank — the largest ever single investment in the sector — and Warburg Pincus’ $384 million pre-IPO investment in ICICI Lombard General Insurance.

On the back of its two mega bets (Flipkart and Paytm), Softbank emerged as the largest investor during the year with investments totaling over $4 billion (including a $250 million investment in Oyo Rooms).

Other top investors include Canadian pension fund CPPIB with $2 billion investments across five companies; while Warburg Pincus invested $1.6 billion across nine companies, and KKR invested about $680 million.

China’s Tencent emerged as a significant strategic investor in the Indian Internet and mobile sector with investment of $1.1 billion across home grown leaders like Flipkart, Ola, Byjus Classes and Practo.

 

Source: Business Standard

PE/VC investments hit 10-year high at $3.1 bn in May

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PE, Venture Capital flows up 155% in May to $ 3 billion; SoftBank – Paytm deal tops

Private equity and venture capital (PE/VC) investments have recorded the highest monthly investments in the past 10 years at $3.1 billion in May 2017. For the third consecutive month in a year, the investment flow crossed the $2-billion mark.

 

The financial services sector topped the table on account of the $1.4-billion investment by Softbank in Paytm. This deal accounted 46 per cent of aggregate deal value for the month.

 

According to Ernst & Young (EY) data, the month recorded a 264 per cent increase in terms of value and 23 per cent in volume over May 2016. PE/VCs have invested $3,064 million across 55 deal in May this year as against $843 million across 45 deals in May 2016.

 

There were five deals of more than $100 million aggregating to $2.3 billion, accounting for 75 per cent of the aggregate deal value in May 2017.

 

Another important deal during the month was the $500-million investment by Canada Pension Plan Investment Board (CPPIB) in Indospace (a real estate platform for industrial and logistics parks) for a majority stake, thus taking the investments by Canadian pension funds in 2017 close to $2 billion.

 

Mayank Rastogi, partner and leader for PE, EY said that Indian PE/VC market has significantly matured over time. Five to seven years ago, the classic growth capital was the only meaningful capital pool available with limitations such as investment horizon and return expectations, and could not have suited some specific situations.

 

There are a variety of capital pools available ranging from angel/VC to buyout funds, family offices, pensions and sovereigns, corporate funds, debt funds, sector-focused funds providing solutions that address specific needs. This is one of the key drivers for continuing buoyancy in the PE/VC investments in India despite slow growth capital investing.

 

Financial services ($1.6 billion across 11 deals) emerged as the most active sector on account of the Paytm-Softbank deal, the largest deal in the financial services sector till date. The real estate sector bagged four deals worth $709 million, followed by e-commerce sector’s six deals worth $211 million in terms of activity.

 

May 2017 recorded $1 billion in exits and was the second consecutive month with more than $1 billion in exits.

 

The strong buyout trend established over the past two years continued into 2017 with $2 billion invested across 18 deals till date.

 

Between January and May, there was a significant increase of over 60 per cent compared to 2016 and over 100 per cent compared to 2015, both, in terms of value and volume.

 

Debt deals recorded the biggest monthly volume since 2014 with $377 million recorded across 12 deals.

 

Given the buoyancy in the public markets, open market deals emerged as the preferred mode of exit, accounting for 36 per cent of exits by value and 50 per cent by volume, similar to the trend seen in the previous month.

 

Till date, open market exits have accounted for 49 per cent of the total value of exits in 2017 compared to 25 per cent for the whole of 2016. May 2017 recorded $90 million in fund raise, a decline of 82 per cent and 76 per cent as compared to May 2016 and April 2017 respectively. The plans for fund raise announced during the month stood at $908 million.
There was one PE-backed initial public offering (IPO) in May 2017 (S  Chand, a publishing company, primarily in the education space), which saw Everstone exiting a 13.9 per cent stake for $48 million. Till May 2017, PE-backed IPO tally stands at four compared to eight during the same period in 2016.

 

Financial services emerged as the leading sector with exits worth $466 million across six deals followed by the healthcare sector with exits worth $260 million across three deals.

 

Source: http://www.business-standard.com/article/companies/pe-vc-investments-hit-10-year-high-at-3-1-bn-in-may-117061300599_1.html

SoftBank infuses Rs 1,675 crore in Ola Cabs; fresh funds to help Bengaluru co take on rival Uber

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Japanese investor SoftBank has pumped in about Rs 1,675 crore in fresh funding in Indian transportation startup Ola to give it more muscle to take American rival Uber head-on.

SoftBank subsidiary SIMI Pacific Pte picked 12,97,945 shares valued at Rs 10 at a premium of Rs 12,895 in ANI Technologies — which runs Ola — filings with the Registrar of Companies showed.

Reuters

The allotment of shares was done in November last year, it added.

The latest funding, however, is believed to have come at a lower valuation.

According to sources, the move comes at a time when Softbank is working on selling Snapdeal, an e-commerce platform it invested heavily in India, to larger rival Flipkart.

The Bengaluru-based firm was aggressively looking at raising funds to compete with Uber, the world’s most valuable start-up. After selling its Chinese business to Didi last year, Uber has now set sights on India making it one of its top priorities.

Though Indian Internet companies have seen a boom in user base, their valuations have come down as investors are now focusing on path to profitability and building a sustainable business model. Flush with private equity and venture capitalist money, many start-ups continue to have high burn rate that has been a concern for investors.

Earlier this week, India’s largest e-commerce firm Flipkart raised $1.4 billion from Tencent, eBay and Microsoft in a round that saw its valuation fall from $15 billion to $11.6 billion now.

Source: http://www.firstpost.com/business/softbank-infuses-rs-1675-crore-in-ola-cabs-fresh-funds-to-help-bengaluru-co-take-on-rival-uber-3383644.html

SoftBank to invest $1 billion in US venture OneWeb as part of $50 billion pledge

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SoftBank Group Corp has agreed to invest $1 billion in US. satellite venture OneWeb Ltd, marking the first tranche of a $50 billion US. investment the Japanese telecoms and technology company’s founder Masayoshi Son pledged to President-elect Donald Trump.

 

“Earlier this month, I met with President-Elect Trump and shared my commitment to investing and creating jobs in the United States,” Son said in a joint statement with OneWeb. “This is the first step in that commitment.”

The investment is part of a $1.2 billion fundraising by OneWeb, which is seeking to provide affordable internet access to people around the world with satellites.

The remaining $200 million will be funded by its current investors, which include Qualcomm Inc, Airbus Group and Virgin Group. The transaction is expected to close in the first quarter of 2017.

In making his $50 billion pledge in the meeting with Trump, Son said his investment would create 50,000 new jobs, a move the US. President-elect claimed was a direct result of his election win.

The latest investment will come directly from SoftBank, not from a $100 billion tech fund it is launching with Saudi Arabia, even though Son has said that large-scale investments would be made through the tech fund to avoid a further expansion of its debt.

OneWeb, established in 2012 and based in Arlington, Virginia, plans to use the funds to build a plant in Florida to produce low-cost satellites, creating almost 3,000 new jobs in the United States over the next four years.

Son is steering SoftBank, a diverse company that holds stakes in US carrier Sprint, Chinese e-commerce giant Alibaba and other firms, towards cutting-edge tech investments as the telecoms services markets mature. It purchased U.K. chip design firm Arm Holdings for $32 billion this year in Japan’s largest ever overseas deal.

Source: http://economictimes.indiatimes.com/articleshow/56068014.cms

Japanese investors keen on India’s infra growth story: Arun Jaitley

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TOKYO: Japanese conglomerate SoftBank and a number of investors here have shown keen interest in investing in India’s “infrastructure growth story”, Finance Minister Arun Jaitley said today as he kicked off his 6-day visit to Japan aimed at attracting investments from Asia’s second biggest economy.

After a meeting with Jaitley, SoftBank Group CEO Masayoshi Son said he is also interested in Internet companies as well as solar energy sector, where he has already announced $20 billion investment through a joint venture.

“There are people who want to participate in infrastructure growth story. For example, at the SoftBank meeting we just had, they are looking at one of the biggest investments in solar power already,” Jaitley said after meeting Son.

“There are people who want to participate in infrastructure growth story. For example, at the SoftBank meeting we just had, they are looking at one of the biggest investments in solar power already,” Jaitley said after meeting Son.

In June last year, SoftBank announced that the group was forming a joint venture with Bharti Enterprises and Taiwan’s Foxconn Technology Group to invest about $20 billion in renewable energy in India. The JV would aim to generate 20 gigawatts of electricity.

“They have made considerable headway and have identified location. It will probably be one of the largest investment in those areas,” Jaitley said.

The Japanese telecom and Internet giant has made a string of tech investments in India, amounting to $2 billion in the past two year. SoftBank is looking at accelerating the pace of investments in the future.

“India has a great future… We are interested in investing for Internet companies, also for solar energy. We would make a strong commitment,” Son said.

He had previously said that India’s market is poised for massive growth, making it an important destination for investors.

SoftBank’s investments in the past two years include $627 million in online-retailing marketplace Snapdeal and leading a $210 million funding round in taxi-hailing app Ola Cabs.

It paid $200 million for a 35 per cent stake in InMobi, an Indian mobile-advertising network, starting in 2011.

SoftBank also has a JV with Bharti Group, Bharti SoftBank, the investments of which include the mobile application Hike Messenger. Its other investments include real-estate website Housing.com, hotel-booking app Oyo Rooms and Grofers.

Son had previously predicted that India’s e-commerce industry would become a $500 billion business in the next 10 years.

SoftBank, which owns one of Japan’s biggest mobile carriers and a controlling stake in US-based Sprint Corp, has been moving quickly to expand its Internet and media holdings.

As the largest shareholder in Alibaba Group Holding Ltd, the Chinese e-commerce company, SoftBank has ample resources to deploy for acquisitions.

Source: http://economictimes.indiatimes.com/articleshow/52491788.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Japan’s SoftBank wins first solar project in India

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Marking its debut in the Indian solar sector after its investment announcement of $20 billion, Japan’s SoftBank won its first solar power project in India. The Japanese firm won the 350 megawatt (Mw) project, under the Jawaharlal Nehru National Solar Mission (NSM), through its joint venture (JV) company SBG Cleantech.

SBG Cleantech bid the lowest tariff of Rs 4.63 per unit to win the entire tendered capacity of 350 Mw. This is the lowest bid this year for solar power. Last month, US firm SunEdison had won a 500-Mw solar power park in Andhra Pradesh at the same tariff.

Indiabulls’ Yarrow Infrastructure, Azure Power, Reliance CleanGen, Goldman Sachs-backed ReNew Power, US’ First Solar and China’s Trina Solar were also in the fray.

“Our goal is to create a market-leading renewable energy company, to fuel India’s growth with clean, reliable and affordable sources of energy. I am glad we could open our account with this win. This project will immensely contribute to the Prime Minister’s vision of meeting the country’s energy demands through clean sources and India’s commitment to providing a safe environment, following the recent Paris convention,” said Nikesh Arora, president and chief operating officer of SoftBank, in a statement.

In June this year, SoftBank had tied up with Foxconn and Bharti Enterprises to invest in the Indian solar energy sector, committing $20 billion. This is its second bid participation after the AP solar park and the first win for any power project through its JV, SBG Cleantech.

“SoftBank is establishing itself as a serious player. The company is likely to be a strong contender in the upcoming national bids as well,” said Jasmeet Khurana, associate director (consulting), Bridge to India.

SBG Cleantech has Bharti veterans Manoj Kohli as executive chairman and Raman Nanda as chief executive. The company is headquartered in New Delhi.

“Of the 100 gigawatt (Gw) target set by the PM, the SoftBank venture will look at solar power generation of 20 Gw. The investment will be made through the next 10 years. Acceleration will depend on the support of the central and local governments, and NTPC,” SoftBank founder & CEO Masayoshi Son had said in June during the launch of the joint venture.

According to market experts, the recent bids show there are only 10-12 developers who have the appetite to continuously try and take up large projects at current tariff levels, which has gone below Rs 5 a unit.

“The government and power distribution companies must be happy about the results and this might be good for continued policy support for new allocations across India. With such results, the states are likely to be much more willing to allocate land to solar parks and take the NSM route to attract solar investments,” said Khurana.

Sun Power

Company Tariff                                                              (Rs per unit)

SBG CLEANTECH LTD (SoftBank)                                      – 4.63

Yarrow Infrastructure Limited (IndiaBulls)                          – 4.64

Azure Power India Private Limited                                        – 4.76

Reliance CleanGen Limited                                                     – 4.88

ReNew Solar Power Private Limited                                       – 5.17

MIRA ZAVAS PRIVATE LIMITED (China’s Trina Solar)  – 5.18

Marikal Solar Parks Pvt Ltd (US’ First Solar)                       – 5.34

*Parent  institutions in brackets

 

Source: http://www.business-standard.com/article/companies/japan-s-softbank-wins-first-solar-project-in-india-115121500246_1.html

Japanese PM Abe on 3-day visit to India starting today; number of pacts on table

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A Rs 98,000-crore deal to build a bullet train network is among a number of agreements likely to be signed during Japanese Prime Minister Shinzo Abe’s three-day visit beginning on Friday during which he will hold annual summit talks with Prime Minister Narendra Modi.

The focus of the visit will be on forging greater synergies between two major Asian economies and take forward the special strategic ties.

In the 9th annual Indo-Japan summit talks on Saturday, Modi and Abe will review implementation of various decisions taken in course of last one year to enhance economic ties, particularly in the trade and investment sector.

Sources said a number of agreements including awarding the Rs 98,000 crore contract to build India’s first bullet train network will be inked.

After the talks, he will leave for Varanasi, which is Modi’s Parliamentary constituency, where he will attend Ganga Aarti at famous Dasaswamedh Ghat. Modi will accompany Abe during his nearly four-and-a-half-hour-long visit to Varanasi.

Abe will return to New Delhi in the evening.

The Japanese Prime Minister had accompanied Modi during his visit to Kyoto last year.

In Delhi, Abe will call on President Pranab Mukherjee, attend a Japan-India innovation seminar and interact with a group of business leaders.

At the last Summit meeting held in Tokyo last year, the two prime ministers had agreed to elevate the relationship to “Special Strategic and Global Partnership”.

Modi had visited Japan from August 30 to September 3 last year during which that country had announced doubling of its private and public investment in India to about $34 billion over a period of five years.

During the summit talks last year, Modi and Abe had agreed to enhance defence and strategic cooperation to a new level and also decided to speed up negotiations on civil nuclear deal.

While agreeing on greater defence equipment and technology cooperation, the two sides had decided to expedite discussions on modalities for the sale of Japanese US-2 amphibian aircraft.

Foreign Secretary S Jaishankar had held talks with top Japanese officials in Tokyo last month to finalise agenda and other details of Abe’s visit.

India and Japan have been expanding their economic and strategic engagement in recent years resulting in cooperation in a vast swathe of fields including defence and security.

The economic engagement witnessed significant rise after both countries signed a a Comprehensive Economic Partnership Agreement (CEPA) in 2011.

Source: http://www.businesstoday.in/current/economy-politics/japanese-pm-shinzo-abe-on-3-day-visit-to-india-from-today-number-of-pacts-on-table/story/227027.html