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How private equity investments in Indian companies grew in Q3 A 6 per cent year-on-year rise in investments was led by Reliance Jio's deal with Brookfield and the overall IT sector.

By Debroop Roy

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Indian companies received $10.1 billion in the third quarter of 2019 from private equity and venture capital firms, according to data from Venture Intelligence (VI), a financial research firm. The quarter's largest investment came from Canada-based Brookfield Asset Management which formed a deal for telecom operator Reliance Jio's tower business.

A 6 per cent increase in investment value from a year earlier was despite a fewer number of deals, falling to 167 from 218, according to data.

One Deal Put Telecom On Top

Asset manager Brookfield's deal with Reliance Jio, touted as the single-biggest private equity deal in India, meant the telecom sector led the game of numbers in the three months ended September 30.

The deal, disclosed by Reliance Jio in July, will see an investment of $3.66 billion from Brookfield. The Indian conglomerate has said the money will be used to repay debt. This transaction was also the only investment by any private equity into the Indian telecom sector during the period.

IT Sector Came Second, Investments Fell

Investments in the information technology and information technology-enabled services sectors came second at $3.55 billion with 107 deals.

The sector's biggest -- and the quarter's second biggest -- deal came in July when Baring Private Equity Asia agreed to buy healthcare analytics firm CitiusTech for $880 million. It was Baring's first investment in a health tech venture in India. CitiusTech provides healthcare technology services to medical technology firms, healthcare companies and life sciences organizations.

A $414 million investment for business-to-business e-commerce company Udaan came in third in terms of value in the quarter. The funding round was led by Lightspeed Ventures, DST Global and Altimeter Capital. Udaan is a platform designed for small and medium-sized businesses to sell their products directly to consumers.

Despite having two of the biggest deals in the quarter, the total value of investments in the sector fell about 3% on a year-on-year basis.

Renewable Led the Way In Energy

In the quarter, Hyderabad-based Greenko Energy Holdings raised $392 million from Singapore's GIC Holdings and the Abu Dhabi Investment Authority, on the back of growing interest in green energy across the world. Both investors are sovereign funds.

"Indian energy markets are transitioning from deficit markets to demand-driven contracts, requiring reliable, flexible and cost-competitive energy," Greenko's chief executive officer Anil Kumar Chalamalasetty had said in July.

The deal made up for more than 99% of the total investments in the sector during the quarter, which fell about 13% from the year-ago period.

Debroop Roy

Former Correspondent

Covering the start-up ecosystem in and around Bangalore. Formerly an energy reporter at Reuters. A film, cricket buff who also writes fiction on weekends.
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