PE investments worth $1.9 bn in August, dipping 53% from July deals

Month has been better than the sub $1 billion monthly run rate seen in the early months of the coronavirus pandemic

PE/VC investments worth $1.9 billion were made in August: 54 per cent lower compared to $4.3 billion the same month last year and 53% lower compared to this July ($4.1 billion). The decline was due to fewer large deals across segments, according to EY-IVCA data.

August 2020 saw 75 deals, with $1.1 billion invested committed in financial services. “PE/VC investments in August 2020 have been muted compared to May, June and July 2020 that had seen a flurry of PE investments primarily driven by the Jio Platform deals," said Vivek Soni, Partner and National Leader Private Equity Services, EY.

This August has been better than the sub $1 billion monthly run rate seen in the early months of the coronavirus pandemic. 

There is a perceptible improvement in investor confidence as Indian and global markets begin to open up. August saw the financial services sector once again emerge as the top sector for PE/VC investments after a gap of three months with investments worth US$1.1 billion. Another noteworthy sector that is fast gaining investor interest is education, especially edtech, that has recorded investments worth US$1.1 billion in 2020, its highest-ever annual tally.

August 2020 recorded six large deals (value greater than $100 million) worth $1.3 billion compared to 15 large deals worth $3.5 billion in August 2019 and 10 large deals worth $3.1 billion in July 2020. 

The largest deals in August 2020 saw PAG acquire 51% stake in Edelweiss Global Investment Advisors, Edelweiss’ Wealth Management business for $300 million. From a sector point of view, financial services has emerged as the top sector after a gap of three months, recording $1.1 billion in investments across 17 deals, accounting for 55% of all investments in August 2020. 

Infrastructure was next in line with $270 million invested across one deal followed by education with $193 million invested across eight deals and e-commerce with $135 million invested across nine deals. Education has emerged as a standout sector in 2020, aggregating $1.1 billion in investments across 45 deals till date, which is the highest-ever annual figure both in terms of value and volume.

”Except for Private Investment in Public Equity (PIPE) investments that recorded a 5.4 times y-o-y increase ($826 million vs. $153 million in August 2019), all other deal types declined significantly. PIPE deals in August 2020 were the highest in 17 months. 

Buyout deals recorded $570 million across two deals (49% decline y-o-y). Growth investments recorded $330 million across 10 deals (79% decline y-o-y). Start-ups recorded $183 million in investments across 51 deals (87% decline y-o-y), the lowest value in 18 months.