Investments by PE, VC funds more than halve to $1.9B in August: EY

The total fundraising by India-focussed PE and VC firms stood at $480 million in August, which is a 58 percent decline from $1 billion raised in August 2019.
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Investments by venture capital (VC) and private equity (PE) funds more than halved to $1.9 billion (about Rs 13,950 crore) in August as there were no large deals, consultancy firm EY said on Thursday.

Investments stood at $4.3 billion in August last year and $4.1 billion in July this year on the back of deals struck by the Mukesh Ambani-led Jio Platforms, data collated by EY said.

"Although PE/VC investments of $1.9 billion in August 2020 are over 50 percent lower than that in August 2019 as well as July 2020, it has been better than the sub-$1 billion monthly run rate seen in the initial months of the pandemic," EY Partner Vivek Soni said.

He said there is a "perceptible improvement" in investor confidence as the Indian as well as global markets begin to open up. Around $1.9 billion was invested across 75 deals.

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The financial services sector reclaimed its top position for PE/VC investments after a gap of three months, with investments worth $1.1 billion in August, while the education space is also receiving considerable attention with $1.1 billion invested this year, he said.

Exit activity continued to be subdued with only $67 million worth of transactions, primarily coming from open market activity, EY said, adding that buoyant equity markets with many PE-backed IPOs lined up for listing may reverse the trend.

A bulk of the investments in August were 'private investment in public equity' space at $826 million, while there was a decline in all other deal types, the consultancy said.

Going by deal value, there were six deals of over $100 million as compared to 15 in the bracket in August last year and 10 in July, it said.

The total fund raising by India-focussed PE and VC firms stood at $480 million in August, which is a 58 percent decline from $1 billion raised in August 2019.

Edited by Megha Reddy