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Private Equity, Venture Capital Investments Rise 64% To USD 8.3 Bln In March Qtr: Report

India-focused funds raised USD 1.7 billion during the quarter, which is 20 per cent higher compared to the USD 1.4 billion in the same period a year ago.

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There was a 64 per cent jump in private equity and venture capital investments in India during the January-March period at USD 8.3 billion across 266 deals compared to the year-ago period, a report said on Thursday.

However, when compared with the preceding December quarter's total of USD 18.5 billion, the investments have declined by 55 per cent.

At USD 1.8 billion, e-commerce recorded the highest quarterly value of investments in the sector in the past five quarters, the report by the consultancy firm EY and industry lobby India Venture Capital Association, said.

There were 22 large deals during the March quarter, through which Indian companies garnered USD 4.8 billion, it said, adding that the same was lower than the immediately preceding December 2020 quarter's USD 16 billion in investment through 30 such deals.

EY's partner Vivek Soni said there has seen a sequential month-on-month increase in PE/VC investment activity from USD 1.6 billion in January to USD 4.6 billion in March 2021. However, he added that investors can get cautious going ahead.

'… the second wave of COVID-19 infections is surging in India as well as globally. New variants of the virus and the slow vaccine rollout are raising fresh concerns as many governments/ local authorities impose mini-lockdowns, which could endanger the recovery underwriting thesis. Investors could turn cautious till more clarity emerges on government response to the second wave,' he said.

From an exits perspective, the total amount was USD 4.2 billion in the latest March quarter. This is 70 per cent of the entire exit activity of 2020, it said.

The March quarter recorded nine PE-backed initial public offerings which is the highest quarterly number so far, Soni said, adding that out of the at least 90 companies that have filed for IPOs, half are backed by PEs.

During the reporting quarter, growth deals were the highest at USD 4.3 billion across 63 deals, followed by start-up investments worth USD 2 billion across 161 deals, the report said.

Buyouts -- which was the most affected deal strategy post the onset of the COVID-19 pandemic in the first quarter of 2020 -- stood at USD 1.1 billion in the latest March quarter across ten deals, showing a handsome growth while the private investments in public equity stood at USD 385 million across 11 deals.

Credit investments stood at USD 480 million in the January-March quarter compared to USD 880 million in the year-ago period.

India-focused funds raised USD 1.7 billion during the quarter, which is 20 per cent higher compared to the USD 1.4 billion in the same period a year ago. However, it was 56 per cent lower than the December quarter's USD 3.9 billion.