Investments by venture capital (VC) and private equity (PE) funds more than halved to $1.9 billion (about Rs 13,950 crore) in August as there were no large deals, consultancy firm EY said on Thursday.
Investments stood at $4.3 billion in August last year and $4.1 billion in July this year on the back of deals struck by the Mukesh Ambani-led Jio Platforms, data collated by EY said.
“Although PE/VC investments of $1.9 billion in August 2020 are over 50 percent lower than that in August 2019 as well as July 2020, it has been better than the sub-$1 billion monthly run rate seen in the initial months of the pandemic,” EY Partner Vivek Soni said.
He said there is a “perceptible improvement” in investor confidence as the Indian as well as global markets begin to open up. Around $1.9 billion was invested across 75 deals.
The financial services sector reclaimed its top position for PE/VC investments after a gap of three months, with investments worth $1.1 billion in August, while the education space is also receiving considerable attention with $1.1 billion invested this year, he said.
Exit activity continued to be subdued with only $67 million worth of transactions, primarily coming from open market activity, EY said, adding that buoyant equity markets with many PE-backed IPOs lined up for listing may reverse the trend.
A bulk of the investments in August were ‘private investment in public equity’ space at $826 million, while there was a decline in all other deal types, the consultancy said.
Going by deal value, there were six deals of over $100 million as compared to 15 in the bracket in August last year and 10 in July, it said.
The total fund raising by India-focussed PE and VC firms stood at $480 million in August, which is a 58 percent decline from $1 billion raised in August 2019.
Edited by Megha Reddy
Want to make your startup journey smooth? YS Education brings a comprehensive Funding Course, where you also get a chance to pitch your business plan to top investors. Click here to know more.