Private equity and venture capital investments drop to $ 3.6 billion in May: report

Capital investment and venture capital investments more than half to reach $ 3.6 billion in May 2021 from the $ 7.5 billion the previous April and a third less than the $ 5.4 billion the year before, according to a report on Monday .

However, since the start of the year, the venture capital investments of these two categories of investors have doubled to reach $ 20 billion for the first five months of 2021, according to the report by the industry lobby IVCA and the firm of EY advice, stressing that investors remain bullish. .

It can be noted that the country has suffered the ravages of the second wave of the pandemic since April of this year. There were localized lockdowns across the country in May 2021, when there was $ 4.6 billion in investment in Jio platforms in May 2020 despite the nationwide lockdown.

Investors will closely monitor government readiness to avoid / deal with a possible third wave, better vaccine deployment and the impact of the pandemic on the country’s macro and fiscal health in the coming months, EY partner Vivek Soni mentionned.

He pointed to rising global inflation, its impact on commodity prices and the US Fed’s response to curbing inflation as the main risks for India.

The report indicates that the increase in transactions in 2021 is led by sectors resilient to COVID like e-commerce (which received $ 4.3 billion in investment), technology ($ 3.8 billion), pharmacy ($ 1.4 billion), media and entertainment ($ 1.2 billion), education ($ 885 million) and healthcare ($ 801 million).

We expect this “polarization” of investment to continue until the outlook on lockdowns and disruption from the pandemic changes significantly, Soni said.

In terms of the number of transactions, the 60 transactions in May 2021 were almost at the same level as a year ago, but lower than the 70 recorded in April.

Investments in real estate and infrastructure of more than $ 1 billion helped the overall number of deals in May, with investment in pure PE and venture capital deals falling 54% to 2.5 billion of dollars.

From an exits perspective, May 2021 saw divestments of $ 12 billion to become the second best month so far, he said, adding that capital market-induced exits would increase significantly. significant as a number of Indian “unicorns” like Zomato and Paytm follow through on their IPO plans.

Total fundraising in May was $ 154 million from $ 50 million in May 2020, and included Motilal Oswal which raised $ 89 million when its fifth real estate fund closed for the first time.

Edited by Saheli Sen Gupta

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