The private equity and venture capital investment dropped 42 per cent to $4 billion last month across 88 deals against $6.9 billion in the same period last year on the back of sharp run-up in valuation.

However, month-on-month the investments were up 18 per cent after being on downtrend over the past two quarters. 

Exits were recorded at $1.8 billion across 29 deals in November, including six PE-backed IPOs. While exits recorded a 58 per cent year-on-year decline, November saw a return of PE-backed IPOs with six IPOs, the biggest being that of Five Star Business Finance with an Offer for Sale of $246 million, according to the IVCA-EY study.

Highest buyouts

PE and venture capital investor buyouts were the highest at $1.8 billion across four deals against $1.5 billion invested across five deals in November last year. Infrastructure attracted the maximum investment driven by clean energy with $1.6 billion across six deals.

Despite the funding slowdown in private equity investment over the past few months resulting in a 31 per cent decline to $49 billion so far this year, it is still the second-best year. Further, mop up by India dedicated funds is at an all-time high of $15.7 billion and global dry powder topping almost $590 billion, there is significant availability of risk capital that can be deployed in India, said the study.

Vivek Soni, Partner and National Leader, Private Equity Services, EY said after being on a downtrend for many months, the Indian PE/VC investment activity seems to be turning over the tide in the past couple of months.

A significant gap in the bid/ask spreads was the main factor slowing down deal closure activity in June and September quarters and companies raised smaller rounds to minimise dilution.

The valuation gap has reduced and at the same time, some of the global uncertainty has played out well for India, which continues to attract record levels of FDI, he said.

There were seven large deals of $100 million aggregating $2.8 billion against 17 large deals worth $5.4 billion recorded in November last year.

Start-up investments were second highest, recording $903 million across 51 deals last month against $2.4 billion recorded across 62 deals in same period last year.

Exits via the open market were the highest last month with 13 exits worth $857 million. PE-backed IPO exits were the second highest at $361 million. Secondary and strategic deals recorded $217 million and $357 million, respectively.

Funds raised were at $1.9 billion against $610 million raised in November last year. The largest fund-raise was by Kotak Investment Advisors, which raised $500 million for its 13th Real Estate fund.

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