Investments by private equity and venture capital funds were $3.9 billion in November 27 percent lower on an annual basis, and more than half of the $8.5 billion recorded in October, a study said on Thursday.
The report by consultancy firm EY and industry lobby India Venture Capital Association, said for the January-November 2020 period, frenetic deal-making by Reliance Industries Ltd. in its retail and telecom arms has limited the overall decline to 8 percent at $ 41.4 billion across 852 deals.
Investments in Reliance Retail and Jio Platforms alone contributed 17.3 billion of the total $41.4 billion of investments so far in 2020, and if not for these transactions, the overall operation would have almost halved. In November, the drop in operation was due to a decrease in the number of deals to 66, compared with 100 in the previous year and 93 in October 2020, the study said.
Retail and consumer goods were the top sectors from a sector point of view in November, with $1.3 billion in Private Equity/Venture capital investments on the back of major investments in Reliance Retail, it said. In the future, if positive news emerges from the initial roll-out of the various promising vaccines announced globally, Private Equity and venture capital investment operation in India will pick up speed faster than anticipated, Vivek Soni, an EY partner, said. Overall, India’s economic indicators point to a recovery that is quicker than expected.
Exits from Private Equity and Venture Capital funds more than halved at $4.9 billion in January-November 2020, compared to $10.3 billion in the same period last year which is a six-year low, the study said.
Open market exits were the highest at $2.3 billion across 59 transactions so far in 2020, which is a 47 percent decrease compared to the same time in 2019. At $1.1 billion in four IPOs, exits via initial public offerings were second, compared with $247 million in seven IPOs last year.