Riding on the back of 15 large deals worth $6.1 billion, the private equity and venture capital (PE/VC) investments were at $7.5 billion across 67 deals in April. This was 6.5 times higher in value of $1.1 billion recorded in April 2020 and 37 cent higher compared to March 2021 ($5.5 billion).

The PE/VC investments in April last year were impacted by Covid-19 related uncertainty that resulted in significant decline in investment activity. However, the number of deals declined by 12 per cent y-o-y and 36 per cent compared to the previous month (67 deals in April 2021 versus 76 deals in April 2020 and 105 deals in March 2021), according to a report by the Indian Private Equity & Venture Capital Association and EY (IVCA-EY).

The sharp month-on-month decline in the number of deals could be due to investors becoming cautious on account of the rising second wave of Covid-19 infections in India, it said.

Vivek Soni, Partner and National Leader Private Equity Services, EY, said, “2021 has recorded four straight months of sequential increase in PE/VC investments, increasing from $1.6 billion in January to $7.5 billion in April 2021. On a y-o-y basis, investments recorded more than six-fold increase due to the low base effect, as investments in April 2020 were severely curtailed by the then growing uncertainty around the spread of Covid-19”.

Revival in deal activity

“While Covid resilient sectors like pharma, healthcare, edtech, online media, SaaS, Technology and IT/ITeS etc continue to see good traction in both value and volume of PE/VC deals, there has been a significant uptick in the value and volume of investments in the e-commerce sector,” he added.

The revival in deal activity in the reporting month was driven by large deals. April 2021 recorded 15 large deals (value greater than $100 million) worth $6.1 billion compared to three large deals worth $475 million in April 2020 and 17 large deals worth $4 billion in March 2021.

The largest deal in April 2021 saw a new fund of Blackstone along with ADIA, UC Investments and GIC announce acquisition of a majority stake in Mphasis for about $2.8 billion. The next large deal saw a group of investors including Qatar Investment Authority, Singapore’s GIC Pvt Ltd, Goldman Sachs, Naspers and others investing $800 million in Swiggy.

Top sectors

Technology was the top sector with $3.1 billion recorded across nine deals, mainly on account of the $2.8-billion Blackstone-Mphasis deals that was announced, followed by e-commerce with $1.5 billion in investments across 13 deals, highest value of monthly investments in the sector in the past 31 months. The pandemic has accelerated the adoption of e-commerce, which has led to the significant increase in valuations of many direct-to-consumer businesses, stoking significant investor interest.

Financial services sector was next in line with $614 million invested across 12 deals and media and entertainment with $515 million invested across two deals.

Exits

April 2021 recorded 13 exits worth $2.7 billion, almost 23 times the value of exits in April 2020 ($117 million) and 25 per cent higher than the value recorded in March 2021 ($2.1 billion). Secondary exits in April 2021 were highest at $2.1 billion across three deals including the $2-billion Mphasis exit by Blackstone.

The total fund raises in April 2021 stood at $569 million compared to no fund-raise in April 2020. The largest fund-raise in April 2021 saw Alteria Capital raise $179 million in the first close of its second venture debt fund.

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