The PE/VC investments in the country rose to US$ 44.2 billion during the 11 months to 30 November in 2019. This is 18 per cent more than the previous high of US$ 37.4 billion recorded in 2018.
"PE/VC investments in 2019 have clocked over US$ 44 billion till date and could end up at US$ 48-50 billion mark for the year. This is a very significant figure, with PE/VC investments at 1.7-1.8 per cent of GDP, we are almost on a par with China and the global average for PE/VC investments to GDP ratio," said Mr Vivek Soni, partner and national leader (private equity services) EY.
"A significant part of the growth in 2019 has come from the robust investment flow in the infrastructure and real estate sectors (one-third of all investments in 2019), driven by strong interest from yield-hungry global pools of capital in the form of pension funds and sovereign wealth funds, as also by policy reforms and introduction of new investment structures like InvITs and REITs by the Indian government," he added.
In terms of volume, there were 94 deals in November as compared to 68 deals in the year-ago period. While the highest investment flowed into the financial services sector at US$ 1.9 billion, the life sciences sector got US$ 1.2 billion, sector's highest ever value of PE/VC investments in a month. Media and entertainment sector witnessed the third highest investment at US$ 631 million.
There was also increase in number of large deals (value greater than US$ 100 million), as 12 large deals worth US$ 3.8 billion was recorded in November, as compared to just five large deals worth US$ 950 million in November 2018.
The largest deals witnessed in November consist of Alibaba Group's and Softbank's US$ 1 billion investment in Paytm, followed by US$ 627 million in Zee Entertainment Enterprises Ltd by a group of investors, including GIC and Morgan Stanley, and Unison Capital Partners' buyout of Kyowa Pharmaceutical Industry (Lupin's Japan business) for US$ 525 million from Lupin Ltd.
The value of PE/VC exits, too, doubled with November observing 15 exits worth US$ 1.4 billion, compared to 11 exits worth US$ 676 million in the year-ago period. The reason behind this is mainly because of two large open market deals accounting for US$ 1 billion of total exits in November-Bain Capital's and GIC's sale of their combined stake of 14.6 per cent in Genpact Ltd for US$ 625 million, followed by Carlyle selling its 3 per cent stake in SBI Life Insurance Co. Ltd for US$ 393 million.
"While exits have been subdued for most of 2019 with year-to-date exits aggregating to US$ 10.5 billion compared to US$ 27 billion in the same period last year, activity has picked up slightly with the revival of deals in the open market on the back of improvement in capital market sentiment," said Mr Soni.
The value of open market exits was the highest in the last two years during the month at US$ 1.1 billion across five deals, accounting for 82 per cent of total exits by value. Though open market exits witnessed a recovery in conjunction with improvement in capital market performance, there were no PE-backed initial public offerings (IPOs) for three reduced to US$ 172 million during the month, compared to US$ 398 million in November 2018.
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