PE/VC investments climb to an all-time high of $36.7 bn in January-August

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“Private equity and venture capital investments in the first eight months of 2019 have breached the $36.7 billion level, and given the deal momentum in various sectors, by the end of 2019, the total Indian private equity and venture capital investment could potentially be in the range of $48-50 billion," said Vivek Soni, partner and national leader, private equity services, EY.

“Large investments in the infrastructure sector, which has accounted for 35% of all private equity and venture capital investments in India in 2019, have added real momentum to the Indian private equity and venture capital investment activity. The infrastructure theme has witnessed interest from global buyout, pension and sovereign funds, and this trend is expected to remain strong in the near term," he added.

For August, PE/VC investment value rose 39% to $4.4 billion across 82 deals, compared to 59 deals worth $3.9 billion in the corresponding month of last year.

This, according to EY, was on the back of 16 large deals (of value greater than $100 million) and strong investment activity in infrastructure and real estate, which accounted for 35% of the total private equity and venture capital investments in August, compared to 23% in August 2018.

Infrastructure witnessed the highest investments, with deals worth $803 million in August, followed by real estate at $764 million and financial services at $734 million. Five out of the 16 largest deals in August were in infrastructure and real estate sectors, aggregating $1.6 billion.

The largest deal during the month was the investment of $631 million by Singapore’s sovereign wealth fund GIC in IRB Infrastructure Developers’ road platform, followed by Blackstone’s buyout of Coffee Day’s Global Village Tech Park for $400 million.

August saw 20 growth deals worth $1.6 billion, followed by startup investments worth $1.4 billion across 50 deals. Buyout deals worth $1.1 billion across six transactions were recorded in the month.

The month saw 11 exits worth $691 million, 60% lower compared to the value of exits recorded in August 2018 at $1.6 billion.

While most exits happened via secondary share sale, which were the highest at $350 million across three deals, buybacks at $172 million across four deals emerged as the second most preferred exit option.

The largest exit for the month took place when Gaja Capital and Partners Group sold their majority stake in EuroKids International to KKR for about $200 million. It was followed by Multiples PE’s 8% stake sale in Delhivery to Canada Pension Plan Investment Board.

The total funds raised by private equity and venture capital firms in August was at $1.1 billion, lower than the $2 billion raised in August 2018.

The largest amount was raised by Kotak Special Situations Fund, which garnered $1 billion worth of investments to target stressed assets opportunities in the country.

“While domestic factors like growth slowdown, tight liquidity, market sentiment and currency depreciation add to the prevailing uncertainty, seasoned PE investors are expected to forge ahead strongly. We continue to believe that 2019 could be one of the better investment vintages for the Indian private equity and venture capital industry as notwithstanding the bumpy outlook in the short-term, LP (limited partner, investor in a private equity and venture capital fund) and GP (general partner, private equity and venture capital fund manager) interest in India’s long-term growth prospects remains intact," said EY’s Soni.