VC Investments in Startups Decline

Private equity and venture capital investments in India crossed USD 8 billion in July — the highest fund infusion in a month by PE/VC funds — amid strong investment activity in infrastructure and real estate asset classes, a report said on Monday.

According to EY’s private equity deal tracker, July 2019 recorded investments worth USD 8.3 billion across 106 deals against USD 1.8 billion in July 2018 through 70 deals.

“The USD 8.3 billion worth of PE/VC investments in India in July 2019 is the highest value of monthly investments by PE/VC funds ever recorded, eclipsing the previous historical monthly high of USD 7.1 billion invested in March 2019,” said Vivek Soni, Partner and National Leader Private Equity Services, EY.

According to the report, strong investment activity in infrastructure and real estate asset classes drove the overall deal tally as there were USD 4.7 billion worth of mega deals in the infrastructure sector in July 2019.

“With this, the year to date cumulative PE/VC investments in the Indian infrastructure sector add up to USD 12 billion, which is greater than the total investments received by the sector in previous seven years put together,” Soni said.

PE/VC investments in Indian infrastructure so far this year exceed the total PE/VC investment made in the next three largest sectors (financial services, real estate and technology), Soni said.

“On the back of these mega PE/VC investments in Indian infrastructure we are already at 90 per cent of the historical high PE/VC investments recorded in 2018. 2019 is well on its course to be the best year for Indian PE/VC investments,” Soni added.

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According to the report, Brookfield-Reliance Jio’s USD 3.7 billion deal is the largest ever PE/VC deal in India, surpassing the USD 2.5 billion investment made by Softbank in Flipkart in 2017.

Baring PE Asia’s USD 800 million buyout of Citius Tech was the other major deal during July.

July 2019 recorded 14 large deals (deals of value greater than USD 100 million) aggregating USD 7 billion compared to three large deals worth USD 402 million in July 2018. PTI DRR

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