Private Equity, Venture Capital Investments Decline 27% In November
Investments by private equity and venture capital funds were 27% lower on yearly basis in November at $3.9 billion, and more than halved from the $8.5 billion reported in October, a report said on Thursday.
For the January-November 2020 period, frenetic deal making by Reliance Industries Ltd. in its retail and telecom arms has restricted the overall decline to 8% at $41.4 billion across 852 deals, the report by consultancy firm EY and industry lobby India Venture Capital Association, said.
Investments into Reliance Retail and Jio Platforms alone contributed 17.3 billion of the overall $41.4 billion of investments in 2020 till now, and the overall activity would have nearly halved if not for these deals.
In November, the fall in activity was attributed to a decline in the number of deals at 66 as against 100 in the year-ago period and 93 in October 2020, the report said.
From a sector point of view, retail and consumer products was the top sector in November with $1.3 billion in PE/VC investments on the back of large investments in Reliance Retail, it said.
Going forward, PE/VC investment activity in India can pick-up pace faster than expected if positive news emerges from the initial roll out of the various successful vaccines announced globally, Vivek Soni, a partner at EY, said. Overall, India's economic indicators point to a faster than expected recovery and we remain optimistic on sustained PE/VC investment and exit activity, he said.
Exits by the PE and VC funds have more than halved in January-November 2020 at $4.9 billion as against $10.3 billion in the same period last year, which is a six-year low, the report said.
Exits via open market were the highest at $2.3 billion across 59 deals in 2020 so far, which is a 47% decline compared to same period in 2019. Exits via initial public offerings were second at $1.1 billion in four IPOs, as against $247 million across seven IPOs last year.
The period January-November period has seen a 31% decline in new fund raises by the investors at $5.9 billion as against $8.5 billion in the year-ago period, it said.