MUMBAI: Venture investments by private equity and venture capital funds were 27 per cent lower on yearly basis in November at $3.9 billion, and more than halved from the $8.5 billion reported in October, a report said on Thursday.
For the January-November 2020 period, frenetic deal making by Reliance industries in its retail and telecom arms has restricted the overall decline to 8 per cent at $41.4 billion across 852 deals, the report by consultancy firm EY and industry lobby India Venture Capital Association (IVCA), said.
Investments into Reliance Retail and Jio Platforms alone contributed $17.3 billion of the overall $41.4 billion of investments in 2020 till now, and the overall activity would have nearly halved if not for these deals.
In November, the fall in activity was attributed to a decline in the number of deals at 66 as against 100 in the year-ago period and 93 in October 2020, the report said.
From a sector point of view, retail and consumer products was the top sector in November with $1.3 billion in PE/VC investments on the back of large investments in Reliance Retail, it said.
“Going forward, PE/VC investment activity in India can pick-up pace faster than expected if positive news emerges from the initial roll out of the various successful vaccines announced globally. Overall, India’s economic indicators point to a faster than expected recovery and we remain optimistic on sustained PE/VC investment and exit activity,” Vivek Soni, a partner at EY, said.
Exits by the PE and VC funds have more than halved in January-November 2020 at $4.9 billion as against $10.3 billion in the same period last year, which is a six-year low, the report said.
Exits via open market were the highest at $2.3 billion across 59 deals in 2020 so far, which is a 47 per cent decline compared to same period in 2019. Exits via initial public offerings (IPOs) were second at $1.1 billion in four IPOs, as against $247 million across seven IPOs last year.
The period January-November period has seen a 31 per cent decline in new fund raises by the investors at $5.9 billion as against $8.5 billion in the year-ago period, it said.
Source From : Times Of India