PE/VC investments surge 39% to hit $36.7 bn in first 8 months of 2019

With transactions of over $4.4 billion, August 2019 witnessed a 39 per cent jump in venture investing over the year-ago, but there was a 47 per cent slide as compared to July 2019, a report said on Tuesday.

Investments in January-August 2019 period have also reached a new high of $36.7 billion, surpassing the $36.5 billion witnessed in the whole of 2018, the report by the consultancy firm EY and IVCA, said.

"Given the deal momentum in various sectors, by the end of 2019, the total Indian private equity or venture capital investment could potentially be in the range of $48 billion to $50 billion," EY's national leader for private equity services Vivek Soni said.

This data comes at a time when the economic growth has plunged to a six-year low, at 5 per cent for the June quarter, leading to many concerns about the overall potential as well.

"While domestic factors like growth slowdown, tight liquidity, market sentiment and currency depreciation add to the prevailing uncertainty, seasoned PE investors are expected to forge ahead strongly," the report said.

It said infrastructure and real estate investments accounted for 35 per cent of the overall $4.4 billion in investments by private equity or venture capital, which is up from the 23 per cent level in the year-ago period.

The infra sector is getting interest from global buyout, pension and sovereign funds and this trend is expected to remain strong in the near-term, it said.

With Government as well as the private sector looking to monetise assets, there will be much more quality yield- generating assets to exchange hands, either directly or through InvIT structures, the report said.

The financial services trailed infra and realty, with $374 million of deals during the month, it said.

Growth deals recorded the highest value of investments in August 2019 at $1.6 billion across 20 deals, compared to 14 deals worth $1.8 billion in August 2018 followed by start-up investments worth $1.4 billion across 50 deals as compared to $182 million across 32 deals in August 2018.

Buyouts at $1.1 billion across six deals in August were lower than the $1.7 billion across five deals in August 2018, it said.