PE/VE investment plummeted 69 per cent in July to $3 billion across 74 deals, according to IVCA-EY report.
“After remaining resilient for almost six months amid global headwinds of tightening liquidity and rising inflation, Indian PE/VC investment flows for the first time have shown some tepidness. Deals are taking longer to close as investors ask tough questions and take their time to process their deal underwriting thesis,” said Vivek Soni, Partner and National Leader - Private Equity Services, EY.
Startup investment declined 76 per cent on a year-on-year basis. The share of pure-play PE/VC investments (excluding real estate and infrastructure sectors) dropped to a low of 40 per cent in July, compared to 90 per cent in July 2021 and 82 per cent in June 2022. Buyouts is the only segment that reported a recorded growth in July at $1.6 billion, compared to $1.1 billion last year.
Exits decline too
PE/VC exits declined by more than 70 per cent both sequentially and on a year-on-year basis in the absence of large strategic and secondary deals, while the PE-backed IPOs, which were one of the defining features of PE/VC exits last year, continue to remain elusive in 2022.
July recorded the lowest figures at nine exits worth $322 million, compared to $1.2 billion recorded across 24 exits in July 2021 and $2 billion across 18 exits in June. Secondary and strategic exits too were sparse, recording one and three deals respectively. The largest exit in July was by Blacksoil from its investment in projects of the real estate arm of Bollineni Group, (Krishnaiah Projects). The only noteworthy exit in July was by Investcorp from ASG Hospitals (exit value undisclosed).