PE exits via IPOs cross $1 bn in 2017

In yet another successful year of exits, private equity (PE) funds sold shares worth $1.17 billion in 2017 as their portfolio companies went public, data from Venture Intelligence shows.

The figure is 25% higher than the $935 million they sold through initial public offerings (IPOs) in 2016. In 2015, PEs sold stocks worth just $287 million in IPOs.

Several PE investors such as Warburg Pincus, ChrysCapital, Kedaara Capital and others reaped successful exits or partexits through IPOs of firms such as Au Small Finance Bank and Eris Lifesciences.

“Given the buoyancy of the public markets and the liquidity in the system, IPOs seem to have become a favoured route for PE/VC investors to exit,” said Prashant Gupta, partner & national practice head, capital markets, Shardul Amarchand Mangaldas & Co.

The IPO market has seen a record year, with companies raising ₹65,923 crore till November, as compared to a total IPO fund raising of ₹26,493 crore in 2016.

According to Sumit Jalan, co-head of India investment banking and capital markets at Credit Suisse, the attraction of IPOs as an exit route has significantly increased. “With private equity funded companies achieving more scale, we’re seeing them pursue public listings.”

“Even companies that are majority-owned (or substantially owned) by PE/VC investors, have looked at IPO exits, rather than sales to a strategic (buyer) or merger with a larger company,” said Gupta.

MUMBAI: