Jan records PE investments worth USD 2.5 bn: Report

Private equity and venture capital (PE/VC) inflows started 2020 on a strong note as the month of January recorded investments worth USD 2.5 billion up 34 per cent over the year-ago period, a report said on Tuesday.

According to the IVCA-EY monthly PE/VC roundup, PE/VC investments in January 2020 (USD 2.5 billion) were 34 per cent higher than the value recorded in January 2019 (USD 1.9 billion) and 41 per cent lower compared to December 2019 (USD 4.3 billion).

In terms of number of PE/VC investments January 2020 was at par with January 2019.

"After a record setting 2019, PE/VC investments in 2020 are off to a good start with investments worth USD 2.5 billion recorded in January 2020. Infrastructure sector continues to play a big role in this growth, accounting for 36 per cent of all PE/VC investments during the month," said Vivek Soni, Partner and National Leader - Private Equity Services, EY.

Credit investments are also a fast-emerging asset class for PE/VC as investors cherry picked stressed opportunities thrown up by companies that need support to prevent going into National Company Law Tribunal (NCLT).

With a more enabling regulatory and policy framework in place, credit investments witnessed a good start in January 2020, the report said.

There were five large deals (value greater than USD 100 million) worth USD 1.4 billion in January 2020 compared to four deals worth USD 1.1 billion last year.

The largest deal announced in January saw Goldman Sachs and Varde Partners take over the debt of RattanIndia Power Limited for USD 566 million followed by Canada Pension Plan Investment Board (CPPIB), Allianz Capital Partners and Ontario Municipal Employees Retirement System's (OMERS') USD 246 million investment in IndInfravit Trust.

From a sector point of view, infrastructure sector (USD 898 million across five deals) was the top sector in January 2020, followed by financial services (USD 531 million across 14 deals) and e-commerce (USD 264 million across nine deals).

The report further noted that January 2020 recorded 12 exits worth USD 461 million, 39 per cent higher than the value of exits recorded in January 2019 (USD 331 million) but 47 per cent lower than December 2019 (USD 864 million).

The largest exit in January 2020 saw Nexus India Capital Advisors, Jungle Ventures and Naspers sell their combined stake in Paysense Services India Private Limited to PayU Corporate for USD 293 million.