E-commerce sector clearly dominated the mind-space of private equity investors accounting for three of the top five PE deals this year. In the process, e-com replaced IT services, which comprised over half of the top PE deals in 2013.
While buyouts and secondary transactions were the key themes in the top PE transactions last year, in 2014, just one of the top five comprised a buyout and just two were secondary deals.
Infrastructure which used to be among the big deals in the past is yet to see revival of big ticket PE investments (though there was a slew of large M&As in infrastructure).
Here’s a look at the top five PE deals of the year. The list counts single funding rounds rather than multiple rounds by one company.
Flipkart raises $1 billion co-led by Tiger Global & Naspers
The country's top e-commerce firm set a new record not just in the country but arguably globally raising a record $1.91 billion in total this year across three rounds. The second of these topped the charts among the biggest PE deals in the country with a $1 billion fundraise co-led by two of its existing investors Tiger Global and Naspers. Singapore's sovereign wealth fund GIC, along with other existing investors Accel Partners, DST Global, ICONIQ Capital, Morgan Stanley Investment Management and Sofina, also participated.
Within India, this also translated into the third-biggest private equity funding transaction ever. The other two deals include Temasek’s $2 billion deal to buy a stake in Bharti Telecom, a private holding firm of Bharti Airtel, and Qatar Foundation’s $1.2 billion transaction last year to buy a stake in Bharti Airtel.
GIC’s investment in Flipkart is interesting as Temasek, another state investment firm of Singapore, recently backed Flipkart’s domestic arch rival Snapdeal.
Flipkart raised $700 million more
The firm went on to raise $700 million two weeks ago from a slew of investors, including UK-based investment management firm Baillie Gifford, US-based VC fund Greenoaks Capital, Steadview Capital, T Rowe Price Associates and Qatar Investment Authority. The round also saw participations from existing investors DST Global, GIC, Iconiq Capital and Tiger Global.
The addition of new investors has diversified Flipkart's investor base further with more sovereign funds, hedge funds and other asset management firms.
It also raised the bar in terms of firepower to take on the might of Amazon and Snapdeal in India. The latest funding has taken the total amount raised by Flipkart this year to $1.91 billion and its total private funding to date to around $2.45 billion.
Snapdeal raises around $700 million led by SoftBank
Japanese telecom and internet firm SoftBank Corp. made a big bang investment of $627 million (Rs 3,846 crore) in e-commerce marketplace Snapdeal.com. The deal is being routed through SoftBank Internet and Media, Inc. (SIMI), a new unit created a few months ago with Nikesh Arora as its head. Arora, a former top honcho at Google, was roped in by SoftBank chief Masayoshi Son especially to lead investments in the internet domain.
Snapdeal's existing investors also put in an undisclosed amount which is believed to be around $100 million. Kalaari Capital and Nexus Venture Partners are believed to have put in around $65 million as part of this round. This took the total funding by Snapdeal this year to close to $1 billion having raised $239 million early this year across two rounds.
Brookfield buys almost all of Unitech's IT parks for over $500 million
Canadian asset management company Brookfield struck a deal to acquire majority stake in half a dozen IT parks assets in India from AIM-listed India-focused real estate investment firm Unitech Corporate Parks (UCP), for £205.9 million (Rs 2,049 crore or $347 million). The assets counted realty firm Unitech Ltd as a minority partner which is separately selling its stake in four of the six projects for an undisclosed amount. But given the deal value with UCP, Brookfield has valued the whole asset at well over $500 million. This makes it is one of the largest ever real estate deals in the country.
Brookfield Asset Management is an associate of Brookfield Strategic Real Estate Partners, a $4.4 billion global real estate fund. It also has a separate presence in India through a JV with Peninsula Land, the realty arm of Ashok Piramal Group, under Peninsula Brookfield Investment Managers.
Canada's CPPIB buys stake in Kotak Mahindra Bank for $372 million
Kotak Mahindra Bank's promoter Uday Kotak sold 3.24 per cent stake in the firm for Rs 2,200 crore ($372 million) to Canada Pension Plan Investment Board, which manages Canada's national pension fund. The deal was to reduce holding in the firm to meet RBI's call for cutting promoter holding to 40 per cent by September 2014 from 43.58 per cent then. CPPIB has been particularly active in India over the last couple of years and has struck separate investment platforms partnering Shapoorji Pallonji in $200 million JV to invest in leased income-producing office buildings and a $500 million JV with Piramal Enterprises to offer rupee debt financing to residential projects in major urban centres of India. It also backed L&T Infra early this year.