PE investors continue to tread with caution- VCCEdge Q1 2017 Deal Report

[VCCEdge]( [News Corp VCCircle]( VCCEdge, the financial research platform of VCCircle, has released the Deal report for the quarter ending March 2017. The report presents a data-driven overview of PE, M&A and Equity Capital Markets deals in India, with sector and region-wise analysis. This report includes a special "startup" section as we increase our focus on covering investment activities within the startup ecosystem. This is in keeping with our focus on startup related news and analysis we present in the "VCC Startups" section on our website [www.vccircle.com](. One of India's biggest mergers from the recent past (Vodafone-Idea Cellular) was closed within Q1 CY 2017, which made mergers and acquisitions (M&A) the leading category among all deal types. The quarter was further characterised by large placement deals, steady IPO activity and a few large PE investments and exits. Accessing public markets seemed to be a clear preference among investors, particularly for exits. With lacklustre private exits and waning investor confidence in funding new ideas (as evidenced in tepid deal activity), a revival in PE funding seems some way off. PE Deals Enthusiasm in PE investments declined with total deal value falling 22% to $3 billion in Q1 2017 compared to $3.9 billion in the previous quarter. Placements come to the rescue as PE funding languishes Investments by PE funds fell to their worst first quarter performance in 5 years with activity down by 47% and value by 76% Y-o-Y. Angel investment value stood close to their historical low in 5 years at $28 million and VC investments dropped 13% Y-o-Y to $ 556 million. In contrast, Placements recorded their best Q1 on the back of a few large sized deals taking values up by 3.5 times Y-o-Y. While PE exits did not show any major improvement, Open Market exit value bounced back as the preferred exit route replacing M&A (as the preferred option in the first quarter last year). Financials contributed to nearly half of the exit deal values whereas exits in Consumer Discretionary slowed down considerably. M&As The Vodafone - Idea Cellular merger which closed at $12.4 billion perked up aggregate M&A deal values for this quarter to close to $16 billion. However, it is worth noting that deal sizes have been reducing over the last few years, as evident from declining median values of deals. Is 'small is beautiful' the new theme for M&A's? Among sectors, deal activity declined significantly for both Consumer Discretionary and Consumer Staples while Telecommunications made news this quarter for attracting one of the largest mergers in India in recent times. Equity Capital Markets (ECM) ECM activity at 45 deals improved (we saw the second highest quarterly activity in the last 16 quarters). Additionally, deal values quadrupled Y-o-Y and rose 86% Q-o-Q. QIPs are back with a bang QIPs returned to the ECM scene, taking back the baton from IPO's. Although IPOs were the most active of all ECM deal makers in Q1 2017, QIPs dominated the scene with 6 deals accounting for 58% of the total ECM deal value. Startups Startups made an uneventful start this year with deals and value down by 31% and 46% respectively on Q-o-Q terms. Investors prefer late stage funding, wary of early stage companies In contrast to Seed/Angel round and Series A funding which saw steep declines, Series B funding improved 22% (by value) this quarter compared to last year, despite fewer deals (16% less). This may reflect investor caution in funding early stage companies and an increased focus on market-ready proven models. VCCEdge is a leading player in providing India centric financial, deal and company information. The platform has in-depth profiles of private and public companies, deals including private equity, venture capital, M&A, equity capital market issues and debt offerings, key developments, and detailed data on investors and their portfolios. VCCEdge provides information on demand and helps reduce research time, for users including, strategy managers, investors, bankers and consultants. [Download report]( For more information on our products, please feel free to reach out to Vijay Prakash Rai (vijay.prakash@vccircle.com, +91-9987526393). [vccircle]( A-83, Ground Floor, Sector - 2, Noida - 201301, Phone: 0120-4171111 Mosaic Media Ventures Pvt. Ltd., A-83, Ground Floor, Sector 2, Noida, 201301, India [Unsubscribe here](