PE/VC investments see monthly decline of 52% in November to $6.8 billion

November saw PE/VC investments worth $6.8 billion across 102 deals, 76 per cent higher than the same month last year ($3.9 billion), but 52 per cent lower than the investments in October this year ($13.1 billion).

The number of deals is 42 per cent higher than the same month last year and 28 per cent lower than October this year (132 deals), according to the latest IVCA-EY report.

With a month to go, PE/VC investments in 2021 at $72.6 billion have surpassed the all-time high seen in 2020 by 53 per cent, driven by mega investments in start-ups and large buyouts.

Pure play PE/VC investments -- excluding investments in real estate and infrastructure – totalled $5.7 billion and accounted for 84 per cent of all PE/VC investments in November. This is almost twice the value of $2.7 billion in the year-ago month but 50 per cent lower than October 2021 ($12.3 billion).

November saw 17 large deals of value greater than $100 million aggregating to $5.4 billion compared to nine large deals worth $3.4 billion seen last year in the same month. The largest deals include the $1.5 billion buyout of Encora Digital by Advent and $840 million investment in Dream11 by a group of investors including Falcon Edge, D1 Capital, Tiger Global, TPG and others.

Vivek Soni, partner and national leader, Private Equity Services, EY said, “Investment activity in November was dominated by start-ups and exits were dominated by PE-backed IPOs. Start-up investments stood at $2.4 billion with 50 per cent of the investments coming into e-commerce and technology sectors. November also had a record number of PE/VC backed IPOs, taking the total count of PE/VC backed IPOs this year to 39, the highest ever. Apart from new-age sectors like fintech and ecommerce that have seen strong investor interest, the favourable market conditions have helped PE/VC investors list legacy holdings in traditional sectors like industrials, automotive and healthcare at reasonably good valuations.”

By deal type, start-up investments were the highest in terms of value at $2.4 billion across 61 deals, 3.7 times the value recorded in November last year ($655 million) but 40 per cent lower than October this year ($4 billion).

Next in line were growth investments at $2.1 billion across 15 deals, 15 per cent higher than the value recorded last year ($1.8 billion).

Buyouts recorded $1.5 billion across five deals followed by PIPE investments worth $652 million across 11 deals. From a sector point of view, technology was the top sector in November 2021 with $2.3 billion in PE/VC investments across 25 deals. The second largest sector was e-commerce with $982 million recorded across 15 deals.

November saw 21 exits worth $3.6 billion compared with $974 million seen in the same month last year. Cumulative exits in 2021 till date amount to $42.3 billion, 57 per cent higher compared than the previous high of $27 billion seen in 2018.

The largest exits in November include Warburg Pincus selling its 80 per cent stake in Encora Digital to Advent followed by a group of investors including SAIF Partners, Elevation Capital and Softbank selling partial stakes worth $499 million in Paytm during the IPO.