The COVID-19 crisis has taken a clear toll on investor sentiment. April 2020 was the first month in nearly four years in which zero India-dedicated funds were raised, according to the IVCA-EY report on private equity and venture capital investments for the month.

The report said there were no fresh LP commitments to India-focused funds in April 2020, highlighting the drying up of capital for Indian companies, especially startups in the country.

"There was no fundraise recorded in April 2020. This is the first time since August 2016 that we are witnessing a month in which nil India-dedicated funds have been raised," EY and IVCA said in the report.

PE/VC investments in April 2020 (at US$881 million) declined by 73 percent year-on-year and 1.9 percent compared to last month, the report showed. In terms of volume, deals in April 2020 declined 34 percent YoY and 12 percent sequentially.

"April 2020 recorded the third straight month of decline in PE/VC investments in 2020 and the Lowest monthly value of deals in 34 months," according to the report.

Startup deals, though highest in value among all deal types at $347 million, saw a decline of 61 percent YoY.

From a sector point of view, the infrastructure sector ($208 million across two deals) emerged as the top sector due to the large buyout of solar assets by KKR, followed by financial services ($168 million across eight deals) which had the large PIPE deal where GIC invested US$99 million in Bandhan Bank and e-commerce ($145 million across 10 deals) which saw some big investments in the hyperlocal delivery of food and essential services companies – Swiggy and Bigbasket.

Even exits fell steeply in April.

April saw five exits worth $117 million, lowest value of exits in 41 months and the lowest number of exits in 70 months. On a YoY basis exits were down by 91 percent in value ($1.3 billion in April 2019) and 89 percent lower than March 2020 ($1.1 billion).

The largest exit in April 2020 saw Carlyle sell its 13 percent stake in Metropolis Healthcare Limited for $100 million.

While the situation looks grim, the big investments in Jio Platforms over the last few weeks have been a silver lining.

"The large FDI deals announced by Jio Platforms with Facebook, Silver Lake and Vista Partners are expected to boost sentiment as the who’s who of Silicon Valley begins to recognise the potential of a digitally connected India," the report said.

Disclaimer:

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