Private equity (PE) and venture capital (VC) investments rose by 28 per cent year-on-year (YoY) to 34.1 billion in the first half of 2022 over the same period last year, according to a IVCA and EY report.
These funds closed as many as 714 deals in the first half of 2022, including 92 large deals totaling $23.7 billion. Exits recorded $9.6 billion across 120 deals, including seven PE-backed IPOs with $423 million in exit proceeds.
On a half-yearly basis, PE/VC investments in 1H22 recorded a 28 per cent increase YoY, but declined by 32 per cent sequentially. In terms of number of deals, the period recorded an increase of 37 per cent YoY and a decline of 4 per cent compared to QoQ.
Vivek Soni, Partner and National Leader, Private Equity Services, EY India said, “India’s position as an attractive destination for PE/VC investments is expected to remain strong in 2022 given its high growth and macroeconomic and policy stability.”
However, he said, the continuing geopolitical tensions, rising inflation,and other concerns remain key downside risks, making investors circumspect. “We continue to remain ‘cautiously optimistic’ about 2022 PE/VC investments exceeding the 2021 record highs,” he added.
Despite recording a sequential decline amid global headwinds of tightening liquidity and rising inflation, the PE/VC investment flow into India has remained robust, maintaining a monthly average run-rate of $6 billion, which is in line with last year.
From a sector perspective, the financial services sector was at the top in 1H22 with $7.3 billion recorded across 152 deals, almost double the value recorded last year. E-commerce was second in line with $4.2 billion invested across 101 deals, 16 per cent lower than $5.0 billion recorded across 82 deals in 1H21.