Even as private equity and venture fund investments in India have shown a steady growth every sequential month in 2022, the value and volume of investments in November this year was 42 percent lower than the year-ago period.

According to the IVCA-EY monthly PE/VC roundup data, investments worth $4 billion across 88 deals were recorded in November 2022. These investments also included seven large deals worth US$2.8 billion (deals of value greater than $100 million). The data also suggests that exits were recorded at US$1.8 billion across 29 deals in November 2022, including six PE-backed IPOs.

"November 2022 recorded US$4 billion in PE/VC investments, 42 percent lower than the investments in November 2021 but 18 percent higher than October 2022. After being on a downtrend over the past two quarters, PE/VC investments have increased sequentially over the past two months, both in terms of value and volume," Vivek Soni of Private Equity Services.

By deal type, buyouts were the highest in terms of value in November 2022 at $1.8 billion across four deals compared to $1.5 billion invested across five deals in November 2021. From a sector point of view, infrastructure was the top sector in November 2022, driven by investments in clean energy, with $1.6 billion in PE/VC investments across six deals."

Investments

PE/VC investments in November 2022 were recorded at $4 billion, 42 percent lower than in November 2021, which stood at $6.9 billion. But, it was 18 percent higher than in October this year.

The survey suggested that November 2022 recorded a 15 percent YoY decline in deal activity while increasing by 13 percent sequentially. After being on a downtrend over the past two quarters, PE/VC investments have increased sequentially over the past two months, both in terms of value and volume.

November 2022 recorded seven large deals aggregating $2.8 billion, a sharp drop from the 17 large deals worth $5.4 billion recorded in November 2021. October, on the other hand, recorded six large deals worth $2.2 million. The largest deal in November 2022 saw CDPQ buyout Eastern Peripheral Expressway for $770 million.

Infrastructure was the top sector in November 2022, driven by investments in clean energy, with $1.6 billion in PE/VC investments across six deals (one deal worth $537 million in November 2021). The second largest sector was logistics and transportation, with US$602 million recorded across two deals (one deal worth US$14 million in November 2021). Technology, which was the top sector in November 2021, recording $2.1 billion, recorded a 75 percent decline YoY ($527 million in November 2022).

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Spotlight: PE/VC fundraise trends

The last six years witnessed $57.2 billion raised by India's dedicated funds. India dedicated PE/VC fundraising was on an uptrend until 2019. However, on account of the pandemic, fundraising witnessed a slowdown for two years (2020-2021). This trend has reversed in 2022, with YTD fundraising worth $15.7 billion, an all-time high for India.

This is on the back of a global surge in PE/VC fundraising in 2021, during which PE/VC funds raised $732.6 billion, an all-time high and a surge of over 19 percent compared to 2020. In 2022, global fundraising stood at US$615 billion as of Q3.

The PE asset class was the largest at $18.5 billion and accounted for 32 percent of all the India dedicated PE/VC fundraises in the last five years. This was followed by VC funds at S$17.4 billion (30 percent) and real estate funds at $8.2 billion (14.3 percent). Credit and venture debt funds raised $7.1 billion (12.4 percent), making credit the fourth largest category. Infrastructure-dedicated funds (excluding renewables) raised $3.6 billion.

Exits

November 2022 recorded 29 exits worth $1.8 billion compared to $3.1 billion in November 2021 across 21 deals and $1.6 billion recorded across 15 deals in October 2022. November 2022 saw a return of PE-backed IPOs with as many as 6 IPOs, the biggest being that of Five-star Business Finance with an OFS of $246 million in which Sequoia, Norwest, Matrix, and TPG exited a 14.2 percent stake.

Exits via the open market were the highest in November 2022, with 13 exits worth $857 million. PE-backed IPO exits were the second highest worth $361 million. Secondary and strategic deals recorded $217 million and $357 million, respectively.

Fundraiser

November 2022 recorded total fundraises of $1.9 billion, compared to $610 million raised in November 2021. The largest fundraiser was by Kotak Investment Advisors, which raised $500 million for its 13th Real estate fund, a $1 billion platform targeting opportunistic investments in India.

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(Edited by : CH Unnikrishnan)

First Published:Dec 16, 2022 2:48 PM IST