A flurry of deals involving Mukesh Ambani’s Jio Platforms has helped arrest the fall in private equity investments into India at only 10 per cent in the first half of 2020 at USD 18.3 billion, a report said on Monday.
The USD 9.6 billion invested into Jio accounted for more than half of the overall investments by private equity and venture capital (PE/VC) funds, and if not for those, the overall activity would be much lower, EY, a consultancy, said.
Its partner Vivek Soni said it has been a very challenging time for both corporate India and investors as both sides have had to deal with their own set of uncertainties because of the COVID-19 pandemic and added that some the challenges are expected to persist.
He, however, said that the headline numbers have been far better than anticipated largely because of the deals in Jio Platforms.
In terms of volume, number of deals in January-June period declined 11 per cent from the year-ago period’s 499 deals.
One of the biggest reasons for the decline in PE/VC investments in the first half was the under-performance of the infrastructure and real estate sectors which attracted the highest PE/VC investment in 2019 at USD 20 billion, it said, adding in the H1 this year, these sectors received only USD 1.9 billion in investments.
In terms of deal type, buyouts were the most affected with only 14 transactions worth USD 794 million compared to 27 worth USD 6.2 billion in the year-ago period.
Growth deals were the highest at USD 12.7 billion across 93 transactions, up from USD 6.7 billion through 111 deals in the year-ago period, followed by start-up investments at USD 2.7 billion by way of 266 deals versus USD 2.7 billion via 293 transactions.
During January-June, there were credit investments worth USD 1.2 billion across 40 deals, as against USD 1.7 billion across 39 deals and PIPE (private investment in public equity) of USD 882 million across 30 deals versus USD 3 billion across 29 deals in the year-ago period, the report said.
Exits declined by 26 per cent in terms of value to USD 2.9 billion in the first half of this year and if compared to H2 of 2019, the decline was even steeper at 61 per cent.
Over USD 1.6 billion of fundraising activity was observed in H1 which was 71 per cent lower as compared to the year-ago period.