Private equity, venture capital flows grow sixfold on low base


India received venture capital and private equity investments worth $7.5 billion across 67 deals in April, a sixfold rise over the same month last year on low base effect, as per the Indian Private Equity and Venture Capital Association-EY report.

“Year 2021 has recorded four straight months of sequential increase in PE/VC investments, increasing from $1.6 billion in January to $7.5 billion in April,” said Vivek Soni, partner and national leader, private equity services, EY.

“On a y-o-y basis, the investments recorded more than a sixfold increase due to the low base effect, as investments in April 2020 were severely curtailed by the spread of COVID-19.”

As many as 15 large deals contributed $6.1 billion, according to the report.

Key drivers of PE/VC market have been e-com, pharma, healthcare, edutech, online media, SaaS, technology and IT/ITeS. Also, there has been an increase in the number of large deals above $100 million.

“E-commerce sector has recorded $3.7 billion in PE/VC investments in the four months of 2021 compared with $2.8 billion recorded in full-year 2020. The pandemic has accelerated the adoption of e-commerce, which led to a significant increase in the valuation of many direct to consumer businesses,’’ the EY official added.

The largest deal in April 2021 saw a new fund of Blackstone along with ADIA, UC Investments and GIC announcing the acquisition some 75% in Mphasis for about $2.8 billion.

At $2.3 billion, the cumulative value of strategic exits in 2021 was the most in three years with a 17% growth rate, as per the report.



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