CHENNAI: Private Equity (PE) and Venture Capital (VC) investments in India witnessed a 5.4 jump at $5.4 billion in August as compared to $1 billion in a year-ago period.
Meanwhile, big deals between April and June have turned around a slacking ecosystem in which PE investments plunged to a five-year low during the first three months of the year. In all, 10 deals worth $4.1 billion turned the tide.
According to EY’s monthly PE tracker, the e-commerce sector ($2.5 billion across four deals) has been the top beneficiary of PE investments, after a long pause, followed by real estate ($1.6 billion across six deals). Investment in the e-commerce sector doubled to $7.21 billion during January-August period and bulk of investment has come from Softbank’s $2.5 billion investment in Flipkart, $1.4 billion investment in Paytm. and $250 million in hotel aggregator Oyo.
Another big-ticket deal in PE was GIC’s $1.4 billion investment in DLF commercial property assets. “The investments reflects the long-term confidence in India’s strong economic fundamentals. We have observed a dramatic shift in capital movement from the residential sector to pre-leased office and retail assets,” said Samantak Das, chief economist and national director - research, Knight Frank India, in a statement.
There were 25 exits totalling $1.9 billion in August. “At this pace, investments must breach the $20-billion mark and exits the $10-billion mark for the first time in the history of the PE and VC industry in India,” said Mayank Rastogi, EY Partner, Transaction Advisory Services and Private Equity in its latest report.