PE/VC investments dip to 43-month low of $1.6bn in November: Report

Rupee (Photo: Bloomberg)

There were 22 exits worth $ 1.2 billion in November compared to $ 2 billion in November 2022 across 34 deals. (Photo: Bloomberg)


Investments by private equity and venture capital funds plummeted to a 43-month low of $1.6 billion in November, a report said on Tuesday.


The investments were 69 per cent lower than the year-ago period and 60 per cent less than October, the report by industry’s lobby grouping Indian Venture and Alternate Capital Association (IVCA) and the consultancy firm EY said.


By volume terms, there were 58 deals in November 2023 as against 106 in the year-ago period and 73 in October 2023, the report said.


Based on the available data, the consultancy firm’s partner Vivek Soni said he anticipates PE/VC investments for 2023 to come at 10-12 per cent below the $ 56 billion in 2022.


“This fall has been primarily fuelled by a sharp contraction in startup investments and a drop in number of large deals on account of the widening bid ask spread between investor valuations and seller expectations,” he added.


In November, there were six large deals of value greater than $ 100 million, aggregating to $ 993 million, which is just a fourth of what was recorded in the year-ago period.


Actis’s $ 205 million bet for acquiring 321 MW solar assets of Acme was the largest investment in the month, the report said.


There were 22 exits worth $ 1.2 billion in November compared to $ 2 billion in November 2022 across 34 deals.


PE/VC funds raised $ 401 million in November for investing in future, which was lower than the $ 1.9 billion raised in November 2022 and $ 2.4 billion in October 2023, the report added.

First Published: Dec 19 2023 | 5:48 PM IST

According to a report by the Indian Venture and Alternate Capital Association (IVCA) and consultancy firm EY, investments by private equity and venture capital funds in India reached a 43-month low of $1.6 billion in November. This figure represents a 69% decline compared to the same period in the previous year and a 60% decrease from October. The report also revealed that there were only 58 deals in November 2023, compared to 106 in the previous year and 73 in October.

Vivek Soni, a partner at EY, anticipates that PE/VC investments for 2023 will be 10-12% lower than the $56 billion recorded in 2022. Soni attributes this decline to a contraction in startup investments and a decrease in the number of large deals due to a widening gap between investor valuations and seller expectations.

The report highlights that in November, there were only six large deals valued at more than $100 million, totaling $993 million. This amount is only a quarter of what was recorded in the same period the previous year. The largest investment in November was Actis’s acquisition of 321 MW solar assets of Acme for $205 million.

Furthermore, the report mentions that there were 22 exits worth $1.2 billion in November, compared to $2 billion in the same month of the previous year. PE/VC funds raised $401 million in November for future investments, which is lower than the $1.9 billion raised in November 2022 and $2.4 billion in October 2023.

In current context, this report highlights the significant decline in PE/VC investments in India, indicating potential challenges in the investment landscape. The lower investment figures reflect a cautious approach from investors and a reluctance to meet seller valuations, leading to a decrease in deal activity.

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