PE/VC investments decline 22% to $5.4 bn in June, up 45% in H1: Report

Investments by private equity and venture capital funds declined by 22 per cent to $5.4 billion in June, as compared to the $6.9 billion in the year-ago period

Investments by private equity and venture capital funds declined by 22 per cent to USD 5.4 billion in June, as compared to the USD 6.9 billion in the year-ago period, a report said on Monday.

However, if compared with May's USD 4 billion, the investments were higher by 33 per cent, the monthly report by industry lobby group IVCA and consultancy firm EY said.

If one were to compare the inflows into companies in the first half of 2021, the investments were 45 per cent higher at USD 26.9 billion.

Indian PE/VC investment activity grew at a record-setting pace throughout H121 and the deal pipeline indicates that this pace is only going to intensify as 2021 progresses. Both H121 and second quarter notched up lifetime highs for pure-play PE/VC investments at USD 21.9 billion and USD 14.1 billion respectively, EY's partner Vivek Soni said.

Activity in both large deals (of over USD 100 million), as well as mid-market deals (USD 20-100 million) and growth deals, continue to be the mainstay, the material increase in buyout and start-up deals are the growth drivers when we compare PE asset class data to the previous two six-month periods, he added.

From a sectoral perspective, technology, e-commerce, financial services, pharmaceuticals, education, and media and entertainment have either gained on account of COVID or have demonstrated resilience to or a quick bounce back from the pandemic and its aftereffects.

Conversely, PE/VC investments in infrastructure and real estate asset classes and the retail and consumer products sector have shown a material decline, he said.

Buyouts, which was the most impacted deal strategy last year, were the highest in June 2021 at USD 1.9 billion across five deals, followed by growth investments at USD 1.6 billion across 25 deals and start-up investments at USD 1.4 billion across 53 deals, the report said.

June 2021 recorded 12 large deals aggregating USD 3.6 billion compared to 11 large deals worth USD 6.1 billion in June 2020 which include deals worth USD 4.9 billion in Jio Platforms.

From an exit perspective, June 2021 recorded 29 exits worth USD 3.2 billion, 4.8 times the USD 657 million in June 2020 and 74 per cent lower when compared with May's USD 12 billion.

The month recorded total fundraises of USD 325 million compared to USD 121 million raised in June 2020, the report said.